{"appState":{"pageLoadApiCallsStatus":true},"articleState":{"article":{"headers":{"creationTime":"2016-03-26T07:20:56+00:00","modifiedTime":"2016-03-26T07:20:56+00:00","timestamp":"2022-09-14T17:48:52+00:00"},"data":{"breadcrumbs":[{"name":"Academics & The Arts","_links":{"self":"https://dummies-api.dummies.com/v2/categories/33662"},"slug":"academics-the-arts","categoryId":33662},{"name":"Study Skills & Test Prep","_links":{"self":"https://dummies-api.dummies.com/v2/categories/33772"},"slug":"study-skills-test-prep","categoryId":33772},{"name":"ACT","_links":{"self":"https://dummies-api.dummies.com/v2/categories/33775"},"slug":"act","categoryId":33775}],"title":"Recording Cash versus Income — Practice Questions","strippedTitle":"recording cash versus income — practice questions","slug":"recording-cash-versus-income-practice-questions","canonicalUrl":"","seo":{"metaDescription":"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 wit","noIndex":0,"noFollow":0},"content":"<p>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. </p>\n<p>The following practice questions ask you to combine all three transaction types in order to calculate a company's total sales for a day.</p>\n<h2 id=\"tab1\" >Practice questions</h2>\n<p>Use the following information to answer the questions. </p>\n<p>A company has the following sales during the day:</p>\n<ul class=\"level-one\">\n <li><p class=\"first-para\">Sales on account: $20,000</p>\n </li>\n <li><p class=\"first-para\">Cash sales: $10,000</p>\n </li>\n <li><p class=\"first-para\">Credit card sales: $15,000</p>\n </li>\n <li><p class=\"first-para\">The credit card fee paid to the bank is 2% of sales.</p>\n </li>\n</ul>\n<ol class=\"level-one\">\n <li><p class=\"first-para\">What is the total amount of revenue (before fees) recorded for the day?</p>\n </li>\n <li><p class=\"first-para\">What is the total amount of cash recorded for the day?</p>\n </li>\n</ol>\n<h2 id=\"tab2\" >Answers and explanations</h2>\n<ol class=\"level-one\">\n <li><p class=\"first-para\">$45,000</p>\n<p class=\"child-para\">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.</p>\n </li>\n <li><p class=\"first-para\">$24,700</p>\n<p class=\"child-para\">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.</p>\n </li>\n</ol>\n<p>If you need more practice on this and other topics from your accounting course, visit <a href=\"https://www.dummies.com/store/product/Accounting-For-Dummies-5th-Edition.productCd-1118482220.html\">Dummies.com</a> to purchase <i>Accounting For Dummies!</i> Featuring the latest information on accounting methods and standards, the information in <i>Accounting For Dummies</i> is valuable for anyone studying or working in the fields of accounting or finance.</p>","description":"<p>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. </p>\n<p>The following practice questions ask you to combine all three transaction types in order to calculate a company's total sales for a day.</p>\n<h2 id=\"tab1\" >Practice questions</h2>\n<p>Use the following information to answer the questions. </p>\n<p>A company has the following sales during the day:</p>\n<ul class=\"level-one\">\n <li><p class=\"first-para\">Sales on account: $20,000</p>\n </li>\n <li><p class=\"first-para\">Cash sales: $10,000</p>\n </li>\n <li><p class=\"first-para\">Credit card sales: $15,000</p>\n </li>\n <li><p class=\"first-para\">The credit card fee paid to the bank is 2% of sales.</p>\n </li>\n</ul>\n<ol class=\"level-one\">\n <li><p class=\"first-para\">What is the total amount of revenue (before fees) recorded for the day?</p>\n </li>\n <li><p class=\"first-para\">What is the total amount of cash recorded for the day?</p>\n </li>\n</ol>\n<h2 id=\"tab2\" >Answers and explanations</h2>\n<ol class=\"level-one\">\n <li><p class=\"first-para\">$45,000</p>\n<p class=\"child-para\">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.</p>\n </li>\n <li><p class=\"first-para\">$24,700</p>\n<p class=\"child-para\">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.</p>\n </li>\n</ol>\n<p>If you need more practice on this and other topics from your accounting course, visit <a href=\"https://www.dummies.com/store/product/Accounting-For-Dummies-5th-Edition.productCd-1118482220.html\">Dummies.com</a> to purchase <i>Accounting For Dummies!</i> Featuring the latest information on accounting methods and standards, the information in <i>Accounting For Dummies</i> is valuable for anyone studying or working in the fields of accounting or finance.</p>","blurb":"","authors":[{"authorId":9050,"name":"Kenneth Boyd","slug":"kenneth-boyd","description":"Ken Boyd, a former CPA, has more than 37 years of experience in accounting, education, and financial services. He is the owner of Accounting Accidentally (<a href=\"https://www.accountingaccidentally.com/\" target=\"_blank\" rel=\"noopener\">www.accountingaccidentally.com</a>), which provides written and video content on accounting, personal finance, and entrepreneurship topics. His YouTube channel (<a href=\"https://www.youtube.com/user/kenboydstl\" target=\"_blank\" rel=\"noopener\">kenboydstl</a>) has hundreds of videos on accounting and finance.\r\n\r\nIn recent years, Boyd has served as an adjunct professor of accounting at the Cook School of Business at St. Louis University. He has written hundreds of articles for QuickBooks, Investopedia, and a number of other publications.","hasArticle":false,"_links":{"self":"https://dummies-api.dummies.com/v2/authors/9050"}},{"authorId":9051,"name":"Kate Mooney","slug":"kate-mooney","description":" <p><b>Kenneth Boyd</b> is the owner of St. Louis Test Preparation (www.stltest.net). He provides online tutoring in accounting and finance. Kenneth has worked as a CPA, Auditor, Tax Preparer, and College Professor. He is the author of <i>CPA Exam For Dummies</i>. <b>Kate Mooney</b> has been teaching accounting to both undergraduates and MBA students at St. Cloud State University since 1986, after earning her PhD from Texas A & M University. She is a licensed CPA in Minnesota and is a member of the State Board of Accountancy. ","hasArticle":false,"_links":{"self":"https://dummies-api.dummies.com/v2/authors/9051"}}],"primaryCategoryTaxonomy":{"categoryId":33775,"title":"ACT","slug":"act","_links":{"self":"https://dummies-api.dummies.com/v2/categories/33775"}},"secondaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"tertiaryCategoryTaxonomy":{"categoryId":0,"title":null,"slug":null,"_links":null},"trendingArticles":null,"inThisArticle":[{"label":"Practice questions","target":"#tab1"},{"label":"Answers and explanations","target":"#tab2"}],"relatedArticles":{"fromBook":[{"articleId":238694,"title":"ACT Practice Math Questions: Circles","slug":"act-practice-math-questions-circles","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/238694"}},{"articleId":238689,"title":"ACT Practice Math Questions: Interior Angles of a Polygon","slug":"act-practice-math-questions-interior-angles-polygon","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/238689"}},{"articleId":238684,"title":"ACT Practice Math Questions: Working with Angles","slug":"act-practice-math-questions-working-angles","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/238684"}},{"articleId":238681,"title":"ACT Practice Math Questions: Combinations and Permutations","slug":"act-practice-math-questions-combinations-permutations","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/238681"}},{"articleId":238678,"title":"ACT Practice Math Questions: Probability","slug":"act-practice-math-questions-probability","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/238678"}}],"fromCategory":[{"articleId":294142,"title":"ACT Prep 2023 For Dummies Cheat Sheet","slug":"act-prep-2023-for-dummies-cheat-sheet","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/294142"}},{"articleId":268046,"title":"How to Organize Your ACT Essay","slug":"how-to-organize-your-act-essay","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/268046"}},{"articleId":268043,"title":"How to Write a Great ACT Essay","slug":"how-to-write-a-great-act-essay","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/268043"}},{"articleId":268033,"title":"ACT Geometry Test: Triangle Trauma","slug":"act-geometry-test-triangle-trauma","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/268033"}},{"articleId":268023,"title":"ACT Geometry Test: Analyzing Angles","slug":"act-geometry-test-analyzing-angles","categoryList":["academics-the-arts","study-skills-test-prep","act"],"_links":{"self":"https://dummies-api.dummies.com/v2/articles/268023"}}]},"hasRelatedBookFromSearch":false,"relatedBook":{"bookId":281910,"slug":"act-1001-practice-questions-for-dummies","isbn":"9781119275435","categoryList":["academics-the-arts","study-skills-test-prep","act"],"amazon":{"default":"https://www.amazon.com/gp/product/1119275431/ref=as_li_tl?ie=UTF8&tag=wiley01-20","ca":"https://www.amazon.ca/gp/product/1119275431/ref=as_li_tl?ie=UTF8&tag=wiley01-20","indigo_ca":"http://www.tkqlhce.com/click-9208661-13710633?url=https://www.chapters.indigo.ca/en-ca/books/product/1119275431-item.html&cjsku=978111945484","gb":"https://www.amazon.co.uk/gp/product/1119275431/ref=as_li_tl?ie=UTF8&tag=wiley01-20","de":"https://www.amazon.de/gp/product/1119275431/ref=as_li_tl?ie=UTF8&tag=wiley01-20"},"image":{"src":"https://www.dummies.com/wp-content/uploads/act-1001-practice-questions-for-dummies-cover-9781119275435-204x255.jpg","width":204,"height":255},"title":"ACT","testBankPinActivationLink":"","bookOutOfPrint":false,"authorsInfo":"<p><b data-author-id=\"9086\">Lisa Zimmer Hatch, MA,</b> and <b data-author-id=\"9087\">Scott A. 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Recording Cash versus Income — Practice Questions

By: Kenneth Boyd and Kate Mooney and

Updated: 03-26-2016

From The Book: ACT

ACT

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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.

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

Answers and explanations

$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.
$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.

If you need more practice on this and other topics from your accounting course, visit Dummies.com to purchase Accounting For Dummies! Featuring the latest information on accounting methods and standards, the information in Accounting For Dummies is valuable for anyone studying or working in the fields of accounting or finance.

About This Article

This article is from the book:

ACT ,

About the book authors:

Lisa Zimmer Hatch, MA, and Scott A. Hatch, JD, have been helping students excel on standardized tests and navigate the college admissions process since 1987. They have written curricula and taught students internationally through live lectures, online forums, DVDs, and independent study.

This article can be found in the category:

ACT ,