Working Papers_The Accounting Cycle in a Merchandising Corporation.docx - Unit 7 Section 2 Assignment Accounting for Sales and Cash Receipts(27 Points

Working Papers_The Accounting Cycle in a Merchandising Corporation.docx

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Unit 7 Section 2 Assignment: Accounting for Sales and Cash Receipts (27 Points) Part 1 (9 points) Answer the following questions: 1. What is a cash receipt? How do businesses record the receipt of cash? 2. Explain how a purchase made with a store credit card is different from a purchase made with a bank credit card. 3. How are a bank credit card and a bank debit card similar? How are they different? 1 ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________
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Part 2 (6 points) A sales slip shows that $1,500 in merchandise has been sold and the sales tax rate is 4%. Generate the cash receipt's data. Debit (-) Credit (+) Debit (-) Credit (+) 2 Cash Receipt Journal Date Doc. No. Accou nt Name Post Ref. Sales Credit Sales Tax Payabl e Credit Account Receivab le Credit Sales Discou nt Credit Cash in Bank Debit Debit (-) Credit (+)
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Part 3 (6 points) Your accounting supervisor has instructed you to verify the accuracy of the day s bank credit card sales, and then deposit that amount into the business checking account. Summarize the 4 steps that you need to perform. 3 1) 2) 3) 4)
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Part 4 (6 points) Evaluate the practice of using a contra account to record sales returns and allowances. (What is a Contra account and how does it affect the Sales Account?) 4 ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________
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Section 3 Assignment: Accounting for Purchases and Cash Payments ( 17 Points) Part 1 (8 points) List four procedures that a business should use to control its cash payments. 5 1) 2) 3) 4)
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Part 2 (9 points) Determine the due dates and discount amount for the following example: A software company frequently purchases merchandise on account. When it receives an invoice, a clerk puts a processing stamp on the invoice indicating the due date, the amount of any discount, and the amount to be paid. The following invoices were received during March: Instructions: The first invoice has been completed as an example. Prepare a form similar to the one that follows using your spreadsheet software. For each invoice do the following: 1. Determine the due date. Assume that the software company always pays invoices within the discount period. 2. Calculate the discount amount, if any. 3. Calculate the amount to be paid. 4. Calculate the amount the software company will save by taking advantage of all discounts.
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