SALES TRANSACTIONS AND T ACCOUNTS Using T accounts for Cash, Accounts Receivable, Sales Tax Payable, Sales, Sales Returns and Allowances, and Sales Discounts, enter the following sales transactions. Use a new set of accounts for each part, 1-5. 1. No sales tax. (a) Merchandise is sold for $320 cash. (b) Merchandise is sold on account for $385. (c) Payment is received for merchandise sold on account. 2.5% sales tax. (a) Merchandise is sold for $320 cash plus sales tax. (b) Merchandise is sold on account for $385 plus sales tax. (c) Payment is received for merchandise sold on account. 3. Cash and credit sales, with returned merchandise. (a) Merchandise is sold for $340 cash. (b) $30 of merchandise sold for $340 is returned for refund. (c) Merchandise is sold on account for $280. (d) $25 of merchandise sold for $280 is returned for a credit. (e) Payment is received for balance owed on merchandise sold on account. 4.5 % sales tax, with returned merchandise. (a) Merchandise is sold on account for $400 plus sales tax. (b) Merchandise sold on account for $60 plus sales tax is returned for credit. (c) Balance on account is received in cash. (d) Merchandise is sold for $260 cash plus sales tax . (e) $40 of merchandise sold for $260 cash plus sales tax is returned for a refund. 5. Sales on account, with 2/10 , n/30 cash discount terms. (a) Merchandise is sold on account for $450. (b) The balance is paid within the discount period. (c) Merchandise is sold on account for $280. (d) The balance is paid after the discount period.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
SALES TRANSACTIONS AND T ACCOUNTS Using T accounts for Cash,
1. No sales tax.
(a) Merchandise is sold for $320 cash.
(b) Merchandise is sold on account for $385.
(c) Payment is received for merchandise sold on account.
2.5% sales tax.
(a) Merchandise is sold for $320 cash plus sales tax.
(b) Merchandise is sold on account for $385 plus sales tax.
(c) Payment is received for merchandise sold on account.
3. Cash and credit sales, with returned merchandise.
(a) Merchandise is sold for $340 cash.
(b) $30 of merchandise sold for $340 is returned for refund.
(c) Merchandise is sold on account for $280.
(d) $25 of merchandise sold for $280 is returned for a credit.
(e) Payment is received for balance owed on merchandise sold on account.
4.5 % sales tax, with returned merchandise.
(a) Merchandise is sold on account for $400 plus sales tax.
(b) Merchandise sold on account for $60 plus sales tax is returned for credit.
(c) Balance on account is received in cash.
(d) Merchandise is sold for $260 cash plus sales tax .
(e) $40 of merchandise sold for $260 cash plus sales tax is returned for a refund.
5. Sales on account, with 2/10 , n/30 cash discount terms.
(a) Merchandise is sold on account for $450.
(b) The balance is paid within the discount period.
(c) Merchandise is sold on account for $280.
(d) The balance is paid after the discount period.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
