Sales is a(n) (expense/revenue/asset) account and is reported on the (income/balance) (statement/sheet).

. It is a report that summarizes the revenue items,  expense and the difference between, which is called net profit/loss for the period.1 puntoIncome StatementBalance SheetAccountingBookkeeping

Determine each statement if it is True or False. 1. A sale is a transfer of merchandise from one business or individual to another in exchange for cash or a promise to pay cash. 2. When the account is not paid within the credit period, the account is classified as past due. 3. The BIR allows only the direct write off method of recognizing bad debts expense 4. A purchase order is a written order to buy goods, specified therein the name or brand of product/s, specifications and quantity. 5. Sales discount is a contra account used to record cash discounts granted on purchases. 6. The computations of purchases discounts is just the same with the computation on sales discounts. 7. Sales to individuals or entities on credit is called credit sales. 8. A merchandising business activity purchases merchandise from other entity such as food, clothing, or computers, and sells that merchandise to customers for profit. 9. When cash is immediately received as full payment for merchandise sold, we call it cash sales. 10. When a customer failed to pay within the credit period, the customer may issue formal written promise to pay with specified sum of money at definite future date/s, we call it, Note Payable. 11. Sales returns and allowances is a contra account of purchases. 12. When sales returns or allowances is granted to open customers, a credit memo is issued for the amount involved. 13. To generate sales volume and to encourage prompt payment by customers, discounts are offered. 14. Cash discount is deducted from the list price and only the difference will be the basis for invoicing and recording. 15. Trade discount is deducted from the list price and only the difference called the invoice price (or gross sales price) will be the basis for invoicing and recording. 16. Freight-In is an adjunct-account used to record transportation charges merchandise purchases. 17. FOB shipping point means Free on Board shipping point, the buyer bears the transportation cost. 18. Merchandise inventory refers to merchandise purchased for resale.

LO 6.4 Which of the following accounts are used when recording the sales entry of a sale on credit?Choose one answer from the options below.A. merchandise inventory, cashB. accounts receivable, merchandise inventoryC. accounts receivable, salesD. sales, cost of goods sold

The amount of the purchases for a period is presented in:Multiple Choicethe Revenue section of the income statement.the Operating Expenses section of the income statement.the Cost of Goods Sold section of the income statement.the Liabilities section of the balance sheet.

Accounting – Unit 3: AccountsAccounting | Page 45. A business can earn revenue by making cash and credit sales, differentiate betweena cash sale and a credit sale.Cash saleCredit sale6. State the formula to calculate profit and/or loss.7. A business made a sale for $100 and the cost of goods was $60. Calculate the grossprofit for the business and using the definition of an expense, explain why the cost ofgoods sold will be treated as an expense.Answer: