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Homework answers / question archive / Chapter 6 Test Review Terms: Bank credit memo (advice) Is an official notice from a business or a bank that documents a refund Cash receipts daily summary A list of cash received by a business Clearing an account balance An amount of money that can be withdrawn

Chapter 6 Test Review Terms: Bank credit memo (advice) Is an official notice from a business or a bank that documents a refund Cash receipts daily summary A list of cash received by a business Clearing an account balance An amount of money that can be withdrawn

Accounting

Chapter 6 Test Review

  1. Terms:
  1. Bank credit memo (advice)

Is an official notice from a business or a bank that documents a refund

  1. Cash receipts daily summary

A list of cash received by a business

  1. Clearing an account balance

An amount of money that can be withdrawn. Until funds are considered to be cleared.

  1. Harmonized Sales Tax (HST)

It is a combination between provincial and federal tax.

  1. Opening entry

First entry made when a new business is starting

  1. Purchase invoice

Purchase on account made by the business

  1. Sales invoice

Sale on account to a customer.

  1. Credit

The right side of an account

  1. Bank debit memo (advice)

A bank document informing the business of decrease made in the business’s bank account.

  1. Cash sales slip

A business dorm showing the details of a transaction in which goods or services are sold to a customer for cash

  1. Compound entry

A transaction that affects more than two accounts

  1. Journal

A journal is a book in which the accounting entries for all transactions are first recorded

  1. Point of sale (POS) terminal

Is an electronic device cash register used to process payment at retail locations.

  1. Remittance

A payment being made to a creditor or the government

  1. Sales tax

An additional charge added to sales

  1. Contra account

Account in a ledger that reduces the value of a related account.

Eg. HST Recoverable is contra (a subtraction from) to HST Payable

  1. Book of original entry

Refers to the accounting journals in which business transactions are initially recorded – General Journal.

  1. Cheque copy

Is a document supporting the accounting entry for a  payment by cheque

  1. Goods and Services Tax (GST)

Tax that’s added to most goods and services sold for domestic consumption. Revenue for federal government

  1. Journal entry

A record of accounts affected by a transaction

  1. Provincial Sales Tax (PST)

A tax charged on sales that needs to be collected from customers and sent to the provincial government

  1. Remittance advice

The tear-off section of a cheque explaining what the cheque is for

  1. Debit

The left side of an account

  1. Source documents

Evidence that a transactions has occurred—e.g. cash sales slip, sales invoice, purchase invoice, cheque copy

 

  1. Name the type of transaction for each source document:

Cash sales slip

 

Purchase Invoice

 

Cash receipts daily summary

 

Bank credit memo

 

Sales Invoice

 

Cheque Copy

 

Bank debit memo

 

 

  1.  Decide if the company has to send the government a cheque (remittance) or if the government will send them a cheque (refund) and calculate the amount.

End of

HST Recoverable

HST Payable

Amount of Remittance

Refund Claimed

Period

Oct. 31

1025.96

988.36

 

 

31-May

5514.23

9633.54

 

 

Nov. 30

215.63

664.25

 

 

 

Dean Hemiston paid $492, including 13% HST, for some equipment.

       

A.

Calculate the price of the supplies before the sales tax was added. Show your work.

 
   

 

             
   

 

             

B.

Calculate the sales tax on the goods. Show your work.

     

 

 

 

Create an opening entry for a new business.

       Jack Whitcombe and Sons is a consultant engineering firm. The accounts for the firm are as follows.

 

Bank

HST Recoverable

Car Expense

A/R—various

HST Payable

Office Expense

Supplies

J. Whitcombe, Capital

Rent Expense

Office Equipment

J. Whitcombe, Drawings

Wages Expense

Automobile

Fees Earned

 

A/P—various

Bank Charges

 

      Journalize the following transactions, using the general journal page below. The rate for HST is 13%. Calculate and add the HST on all sales and purchase transactions. Do not provide explanations. The next page number of the journal is 16.

Transactions

Oct.   2      Cash Sales Slip
No. 102 to S. Stewart, $102.50 plus taxes.

          6      Sales Invoice
No. 617 to Jack Morrison, $250.90 plus taxes.

        10      Cheque Copy
No. 910 to Industrial Suppliers, $500 on account.

        12      Cash Receipt
From Jack Mahoney, $322.50 on account.

           

 

 

18 Purchase Invoice
From Grand’s Stationers, $60.50 for office supplies plus HST of 7.87, total $68.37.

        20      Cheque Copy
No. 911 to Jack Whitcombe, $525 for personal use.

        24      Bank Debit Memo
$31.90 for bank service charge.

        30      Cheque Copy
No. 912 to W. Moss, $900 for part-time wages.

        31      Cash Sales Slip
No. 103 to J. Beck, $450 plus taxes.

        31      Cheque Copy
The balances in the HST accounts for the previous period were: HST Recoverable $770 and HST Payable $1820. Cheque 913 was written to the Receiver General for $1050 to clear the accounts for that period.

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