##### ACT

When a bookkeeper records sales transactions for a company, the way she records them depends on whether the sales are made on account, with credit cards, or with cash.

The following practice questions ask you to combine all three transaction types in order to calculate a company's total sales for a day.

## Practice questions

Use the following information to answer the questions.

A company has the following sales during the day:

• Sales on account: \$20,000

• Cash sales: \$10,000

• Credit card sales: \$15,000

• The credit card fee paid to the bank is 2% of sales.

1. What is the total amount of revenue (before fees) recorded for the day?

2. What is the total amount of cash recorded for the day?

1. \$45,000

Revenue is calculated as sales on account of \$20,000 plus the cash sales of \$10,000 plus credit card sales of \$15,000, totaling \$45,000.

2. \$24,700

Cash recorded for the day includes cash received from the credit card sales and cash sales. First you should calculate cash received from credit card sales. Credit card sales were \$15,000, but the company has to pay a 2% fee to the bank. Thus, (.02)(\$15,000) = \$300 is the fee, so the company receives only the net amount, or \$15,000 less \$300 for a total of \$14,700 from credit card sales. Now you're ready to calculate the total cash recorded. This includes the \$14,700 received from credit card plus \$10,000 received from cash sales for a total of \$24,700.

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