Study Guide 24 Name Part One Identifying Accounting Terms Identifying Accounting Terms Analyzing International and Internet Sales Analyzing Accounts Affected by International and Internet Transactions Directions: Select the one term in Column I that best fits each definition in Column II. Print the letter identifying your choice in the Answers column. Total Perfect Score 10 Pts. 10 Pts. 12 Pts. 32 Pts. Your Score Column I A. bill of lading B. commercial invoice C. contract of sale D. draft E. exports F. imports G. letter of credit H. sight draft I. time draft J. trade acceptance Column II 1. Goods or services shipped out of a seller s home country to a foreign country. (p. 752) 2. Goods or services shipped into the buyer s home country. (p. 752) 3. A document that details all the terms agreed to by seller and buyer for a sales transaction. (p. 753) 4. A letter issued by a bank guaranteeing that a named individual or business will be paid a specified amount provided stated conditions are met. (p. 753) 5. A receipt signed by the authorized agent of a transportation company for merchandise received that also serves as a contract for the delivery of the merchandise. (p. 754) 6. A statement prepared by the seller of merchandise addressed to the buyer showing a detailed listing and description of merchandise sold, including prices and terms. (p. 754) 7. A written, signed, and dated order from one party ordering another party, usually a bank, to pay money to a third party. (p. 754) 8. A draft payable on sight when the holder presents it for payment. (p. 754) 9. A draft that is payable at a fixed or determinable future time after it is accepted. (p. 757) 10. A form signed by a buyer at the time of a sale of merchandise in which the buyer promises to pay the seller a specified sum of money, usually at a stated time in the future. (p. 758) Answers 1. E 2. F 3. C 4. G 5. A 6. B 7. D 8. H 9. I 10. J Chapter 24 Recording International and Internet Sales 233
Part Two Analyzing International and Internet Sales Directions: Place a T for True or an F for False in the Answers column to show whether each of the following statements is true or false. 1. The risk of uncollected amounts is increased with international sales. (p. 753) 2. International sales are just as simple as domestic sales. (p. 753) 3. All transactions in the United States are covered by the same universal commercial laws and the same accounting standards. (p. 753) 4. A draft is sometimes referred to as a bill of exchange. (p. 754) 5. Sales taxes are normally paid only on sales to the final consumer. (p. 756) 6. A seller generally has more assurance of receiving payment from a buyer than from a bank. (p. 758) 7. Most businesses use trade acceptances in international sales. (p. 758) 8. The terminal summary is used as the source document for Internet sales. (p. 761) 9. Companies that sell on the Internet must be able to accept credit card sales. (p. 761) 10. Credit card sales are considered the same as cash sales. (p. 762) Answers 1. T 2. F 3. T 4. T 5. T 6. F 7. F 8. T 9. T 10. T 234 Working Papers TE
Name Date Class Part Three Analyzing Accounts Affected by International and Internet Transactions Directions: Analyze each of the following transactions into debit and credit parts. Print the letter identifying your choices in the proper Answers column. Determine in which journal each of the transactions is to be recorded. G General Journal; CPJ Cash Payments Journal; CRJ Cash Receipts Journal; S Sales Journal Answers Account Titles Transactions Journal Debit Credit A. Cash 1-2-3. Received cash for international sale. (p. 756) 1. CRJ 2. A 3. B B. Sales 4-5-6. Received a time draft for an international sale. (p. 757) 4. G 5. C 6. B C. Time Drafts Receivable 7-8-9. Received cash for the value of a time draft. (p. 758) 7. CRJ 8. A 9. C 10-11-12. Recorded Internet credit card sales. (p. 762) 10. CRJ 11. A 12. B Chapter 24 Recording International and Internet Sales 235
7 4 9 B 1 5 E X P O R I S L L T R A D E A C C E P C O M M E R C I A L I N V F L A D 8 I M P O R T S S 6 2 L 10 3 T I M E D R A F T I G H T D R A F T N I G T E D C E O T A N C E T T R O I A C E F C T O R S A L E F T Across 5. A form signed by a buyer at the time of a sale of merchandise in which the buyer promises to pay the seller a specified sum of money, usually at a stated time in the future. 6. A draft that is payable at a fixed or determinable future time after it is accepted. 7. A statement prepared by the seller of merchandise addressed to the buyer showing a detailed listing and description of merchandise sold, including prices and terms. 8. A draft payable on sight when the holder presents it for payment. 9. Goods or services shipped into the buyer s home country from another country. 10. A written, signed, and dated order from one party ordering another party, usually a bank, to pay money to a third party. Down 1. Goods or services shipped out of a seller s home country to another country. 2. A letter issued by a bank guaranteeing that a named individual or business will be paid a specified amount provided stated conditions are met. 3. A document that details all the terms agreed to by seller and buyer for a sales transaction. 4. A receipt signed by the authorized agent of a transportation company for merchandise received that also serves as a contract for the delivery of the merchandise. 236 Working Papers TE
Name Date Class 24-1 WORK TOGETHER, p. 760 Journalizing international sales transactions 1., 2. RECEIPTS JOURNAL PAGE 10 July 11 M324 12 0 0 0 00 12 0 0 0 00 23 Time Drafts Receivable R221 22 0 0 0 00 22 0 0 0 00 31 Totals 22 0 0 0 00 12 0 0 0 00 34 0 0 0 00 1. GENERAL JOURNAL PAGE 5 July 16 Time Drafts Receivable TD36 0 0 0 00 Sales 16 0 0 0 00 Chapter 24 Recording International and Internet Sales 237
24-1 ON YOUR OWN, p. 760 Journalizing international sales transactions 1., 2. RECEIPTS JOURNAL PAGE 17 Oct. 8 M256 8 4 0 0 00 8 4 0 0 00 30 Time Drafts Receivable R205 10 5 0 0 00 10 5 0 0 00 31 Totals 10 5 0 0 00 8 4 0 0 00 18 9 0 0 00 1. GENERAL JOURNAL PAGE 8 Oct. 17 Time Drafts Receivable TD81 6 3 0 0 00 Sales 6 3 0 0 00 238 Working Papers TE
Name Date Class 24-2 WORK TOGETHER, p. 763 Journalizing Internet sales transactions RECEIPTS JOURNAL PAGE 3 Aug. 21 TS230 1 4 3 2 00 1 4 3 2 00 27 TS231 2 0 1 0 00 2 0 1 0 00 28 TS232 1 2 7 0 00 1 2 7 0 00 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 Chapter 24 Recording International and Internet Sales 239
24-2 ON YOUR OWN, p. 763 Journalizing Internet sales transactions RECEIPTS JOURNAL PAGE 11 Feb. 7 TS44 1 2 5 00 1 2 5 00 14 TS45 2 8 9 00 2 8 9 00 28 TS46 8 00 8 00 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 240 Working Papers TE
Name Date Class 24-1 APPLICATION PROBLEM (LO4, 5), p. 767 Journalizing international sales transactions 1., 2. RECEIPTS JOURNAL PAGE 12 June 1 M79 14 0 0 0 00 14 0 0 0 00 9 Time Drafts Receivable R115 18 0 0 0 00 18 0 0 0 00 19 Time Drafts Receivable R117 22 0 0 0 00 22 0 0 0 00 21 M83 13 5 0 0 00 13 5 0 0 00 30 Totals 40 0 0 0 00 27 5 0 0 00 67 5 0 0 00 1. GENERAL JOURNAL PAGE 5 June 5 Time Drafts Receivable TD27 12 0 0 0 00 Sales 12 0 0 0 00 12 Time Drafts Receivable TD33 7 0 0 0 00 Sales 7 0 0 0 00 25 Time Drafts Receivable TD34 26 5 0 0 00 Sales 26 5 0 0 00 Chapter 24 Recording International and Internet Sales 241
24-2 APPLICATION PROBLEM (LO6), p. 767 Journalizing Internet sales transactions 1., 2. RECEIPTS JOURNAL PAGE 15 Mar. 5 TS113 7 00 7 00 13 TS114 1 2 8 7 00 1 2 8 7 00 20 TS115 0 9 00 0 9 00 27 TS116 2 9 4 5 00 2 9 4 5 00 31 Totals 6 1 4 0 00 6 1 4 0 00 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 242 Working Papers TE
Name Date Class 24-M Mastery Problem (LO4, 5, 6), p. 768 Recording international and Internet sales 1., 2. RECEIPTS JOURNAL PAGE 3 May 8 TS23 14 5 0 0 00 14 5 0 0 00 12 M8 0 0 00 0 0 00 14 Time Drafts Receivable R35 22 0 0 0 00 22 0 0 0 00 18 TS24 18 3 0 0 00 18 3 0 0 00 21 Time Drafts Receivable R37 6 0 0 0 00 6 0 0 0 00 24 M12 12 4 0 0 00 12 4 0 0 00 27 TS25 7 1 0 0 00 7 1 0 0 00 31 Totals 28 0 0 0 00 6 0 0 00 89 1 0 0 00 1. GENERAL JOURNAL PAGE 3 May 5 Time Drafts Receivable TD10 3 0 0 0 00 Sales 3 0 0 0 00 28 Time Drafts Receivable TD11 5 0 0 0 00 Sales 5 0 0 0 00 Chapter 24 Recording International and Internet Sales 243
24-C CHALLENGE PROBLEM (LO4), p. 768 Recording international sales and converting foreign currency 1., 2. RECEIPTS JOURNAL PAGE 11 June 1 M48 9 7 1 62 9 7 1 62 8 M53 2 1 9 1 29 2 1 9 1 29 14 M59 3 8 0 4 91 3 8 0 4 91 19 M60 6 1 9 48 6 1 9 48 28 M72 45 4 8 6 45 4 8 6 30 Totals 53 0 7 2 86 53 0 7 2 86 Exchange U.S. Date Amount Rate Dollars June 1 8 14 19 28 6,207 Chinese yuan.... 6.3883 $ 971.62 28,731 Mexican pesos... 13.11144 2,191.29 4,631 New Zealand dollars... 1.21711 3,804.91 453 European euros... 0.731219.48 2,174,060 Indian rupees... 47.79671 45,485.56 244 Working Papers TE