Nature of Merchandising Business

What account does a merchandising business use for Revenue?

• Fees Earned

• Commissions

• Revenue

• Sales

What accounts would be used for a seller to journalize a Sales Transaction?

• Cash Debit; Sales Credit

• Sales Debit, Merchandise Inventory Credit

• Cost of Merchandise Sold Debit; Merchandise Inventory Credit

• Costs of Merchandise Sold Debit; Sales Credit

Mastercard or Visa is considered a Sales Transaction for the Seller.

• True

• False

The Seller will have a journal entry for Sales on Account:

• Accounts Receivable Dr; Sales Credit

• Accounts Receiveable Dr; Sales Cr; COMS Dr; Merch. Inv. Cr.

• Cash Dr; Sales Cr; COMS Dr; Merch. Inv. Cr.

• Accounts Receivable Dr; Sales Cr; Merch. Inv. Cr.

Credit Terms 3/10 means what?

• Must be paid in 3 days at the earliest; 10 days at the latest.

• 3% discount in 30 days

• 3% discount in 10 days

• None of the Above

The Seller records all credit cards expense every single time one is used.

• True

• False

The Seller issues a ___________ to the buyer for returns.

• Credit Memo

• Invoice

• Debit Memo

• Discount

As the buyer, when uses cash to buy merchandise, the journal entry would be:

• Cash Dr; Sales Cr

• Merch. Inventory Dr; Cash Cr

• Accounts Receiveable Dr; Merch. Inventory Cr

• Doesn't have to do a journal entry

The Buyer issues a debit memo to the Seller when they have a return.

• True

• False

When the Buyer makes purchases on account; the accounts they will use are:

• Merch. Inv. Dr; A/P Cr.

• A/P Dr; Merch. Inv. Cr

• COMS Dr; A/P Cr.

• A/P Dr; Cash Cr.