Question 19 The journal that should be used to record the return of merchandise

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Question 19 The journal that should be used to record the return of merchandise for credit is the Purchases journal General journal O Cash payments journal Accounts payable journal Question 20 The Sales Discount account is a(n) revenue account O contra-revenue account expense account contra-expense account Question 21 Assume the gross amount of an invoice is $1,000 and a trade discount of 25% is allowed. The dollar amount of the trade discount is $1,000 $750 $250 $25 Question 22 For Income Statement reporting purposes, Freight-In is subtracted from cost of goods sold added to inventory Osubtracted from net sales added to purchases Question 23 Which of the following accounts would be found in the purchases journal? Sales Cash Returns and Allowances O Freight-In

Explanation / Answer

q19.D.accounts payable journal.

Accounts payable account is debited with corressponding credit made to inventory account.

q20.B.contra revenue account.

Sales discount is a contra reveue account and is presented as a deduction from sales revenue account.

q21.C.$250.

trade discount = $1,000 * 25% =>$250.

q22.C.subracted from net sales.

freight is a part of cost of goods sold, which is deducted from net sales to arrive at gross profit.

q23.D.Freight -in.

sales, cash, returns and allowances have separate journals.

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