50.1K

Verified Solution

Link Copied!

Discussion Questions 1. How are the net sales for an accounting period determined? 2. What purposes does the schedule of accounts receivable serve? 3. How do retail and wholesale businesses differ? 4. Why is a sales return or allowance usually recorded in a special Sales Returns and Allowances account rather than being debited to the Sales account? 5. How is a multicolumn special journal proved at the end of each month? 6. What kind of account is Sales Returns and Allowances? 7. The sales tax on a credit sale is not collected from the customer immediately. When is this tax usually entered in a firms accounting records? What account is used to record this tax? 8. In a particular state, the sales tax rate is 5 percent of sales. The retailer is allowed to record both the selling price and the tax in the same account. Explain how to compute the sales tax due when this method is used. 9. What two methods are commonly used to record sales involving credit cards issued by credit card companies? 10. What procedure does a business use to collect amounts owed to it for sales on credit cards issued by credit card companies? 11. When a firm makes a sale involving a credit card issued by a credit card company, does the firm have an account receivable with the cardholder or with the credit card company? 12. What is the discount on credit card sales? What type of account is used to record this item? 13. Why are bank credit card sales similar to cash sales for a business? 14. What is open-account credit? 15. What is a trade discount? Why do some firms offer trade discounts to their customers?

Answer & Explanation Solved by verified expert

See Answer