Which one of the following is incorrect? Increase to the sales account is record

Question

Which one of the following is incorrect? Increase to the sales account is recorded as credit. Decreases to the sales account are recorded as debits. The Normal Balance of the sales account is a credit. A sale is an Expenses account. 2 points Save Answer QUESTION 2 Sales on account affects the accounts receivable account. accounts payable account. cash in bank account. expenses account. 2 points Save Answer QUESTION 3 The Journal entry for purchases on account is debit purchases; credit accounts payable. debit accounts payable; credit purchases. debit asset account; credit accounts payable. debit cash in bank; credit sales account. 2 points Save Answer QUESTION 4 A Debit Memorandum is used to notify suppliers of a return or to request an allowance. accounts payable controlling. total sales to customer. total purchase on account. 2 points Save Answer QUESTION 5 FOB means free on board. free on back. free on bail. foreign on board. 2 points Save Answer QUESTION 6 A purchases journal is a special journal to record all purchases on account. cash purchases. sales on account. cash sales. 2 points Save Answer QUESTION 7 The Cash Payments journal is also called the cash receipt journal. purchase journal. special journal. cash disbursement journal. 2 points Save Answer QUESTION 8 Bank service charges are deducted from the checking account. cash account. purchases account. sales account. 2 points Save Answer QUESTION 9 The bank card fee is calculated as a percentage on total amount recorded on the bank card sales slips. the total sales. cash sales. purchases entered in the total purchases account. 2 points Save Answer QUESTION 10 Contra cost of merchandise account means the purchase returns and allowance account. the cash and credit purchases. the sales return and allowance account. total cash and credit sales.

Explanation / Answer

Solution:

1. A Sale is an Expenses Account is Incorrect. Sale is a Income Account and has normal balance of sales account is a credit.

2. Sales on account affects the accounts receivable account. Sales on Account creates Accounts Receivable. That is the reason Sales on Account has a direct relationship with Accounts Receivable.

3. The Journal entry for purchases on account is debit purchases; credit accounts payable.

When Purchase are made it is debited to Purchase Account and Credited to Accounts Payable A/c.

4. A Debit Memorandum is used --- to notify suppliers of a return or to request an allowance.

When Debit Memorandum issued it means supplier accounts are debited which may be due to Purchase Return or request an allowance on Purchase due to low quality material or due to other reason..

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