Which of the following accounts usually has a debit balance?

  1. Which of the following accounts usually has a debit balance?

Purchase Discounts

Sales Tax Payable
Allowance for Doubtful Accounts
Freight In
  1. Isaac Co. sells merchandise on credit to Sonar Co in the amount of $9,600. The invoice is dated on April 15 with terms of 1/15, net 45. If Sonar Co. chooses not to take the discount, by when should Sonar make the payment?
May 30
May 15
April 25
None of the above.
  1. Under the periodic inventory system, all purchases of merchandise are debited to the account entitled
Purchases
Cost of Merchandise Available for Sale
Accounts Payable
  1. The Corbit Corp. sold merchandise on account for, $7,200. Corbit Corp. utilizes the periodic inventory system. The cost of the merchandise sold was $3,950. The journal entry(s) to record this transaction would be
Accounts Receivable                     7,200
      Sales                                                  7,200
Cost of Merchandise Sold              3,950
     Merchandise Inventory                         3,950  

Cash                                             7,200
      Sales                                                   7,200
Cost of Merchandise Sold              7,200
     Merchandise Inventory                         7,200  

Accounts Receivable                     7,200
      Sales                                                  7,200

Answer

1) FRIEGHT IN.

- All of the given accounts have credit balance. Whereas, Freight in is the expense and have a debit expense.

2) MAY 30

- Sonar Co is allowed to take discount of 1% if it makes payment by April 30.

- if sonar co chooses not to take any discount, it should make the payment after the maturity date i.e., any date after May 15.

3) PURCHASES

- All purchases of merchandise under periodic inventory system is debited to purchases.

4) Journal entry :

- Account Receivable. $7200 Dr

Sales $7200 Cr

- Cost of merchandise sold. $3950 Dr

Merchandise inventory. $3950 Cr   

_____×_____

ALL THE BEST

HAPPY CHEGGING.

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