Table 7-8 Nordin Avionics
J Cash Receipts Journal -Refer to Table 7-8 at the End of January, What

question 12

Multiple Choice

Table 7-8 Nordin Avionics
J. Nordin Avionics began business on January 1, 2019. The business was started with $10,000 in the cash account and $30,000 of inventory in stock. Nordin uses a sales journal to record credit sales and a cash receipts journal to record all cash receipts, including both cash sales and cash collections of credit sales. At the end of January, the two journals appeared as follows:
Sales Journal $\begin{array}{|l|l|l|l|l|r|}\hline& & & &\text { Accts Rec } & \\\text { Date } & \text { Invoice \# } & \text { Customer } & \text { Post } & \text { DR } & \text { COGS DR/ } \\&&&\text { Ref. } & \text { Sales Rev CR } & \text { Inventory CR }\\\hline \text { Jan } 4 & 1000 & \text { Reed, A. } & & \$ 5,000 & \$ 4,100 \\\hline 6 & 1001 & \text { Charles, B. } & & 1,240 & 990 \\\hline 13 & 1002 & \text { Reed, A. } & & 3,200 & 2,800 \\\hline 20 & 1003 & \text { Williams, D. } & & 900 & 820 \\\hline 22 & 1004 & \text { Charles, B. } & & 5,100 & 4,600 \\\hline & & \text { Total } & & \$ 15,440 & \$ 13,310 \\\hline\end{array}$ Cash Receipts Journal $$\begin{array} { | r | r | r | r | r | r | r | } \hline \text { Date } & { \begin{array} { c } \text { Cash } \\\text { Debit }\end{array} } & \begin{array} { c } \text { Sales Revenue } \\\text { Credit }\end{array} & \begin{array} { c } \text { Accts. } \\\text { Rec. } \\\text { Credit }\end{array} & \text { Invoice \# } & \text { Customer } & \begin{array} { r } \text { COGS DR/ } \\\text { Inventory CR }\end{array} \\\hline \text { Jan 5 } & \$ 3,300 & \$ 3,300 & & & & \$ 2,700 \\\hline 10 & 5,000 & & \$ 5,000 & 1000 & \text { Reed, A. } & \\\hline 14 & 9,000 & 9,000 & & & & 8,000 \\\hline 18 & 1,240 & &1,240 & 1001& \text { Charles,B. } & \\\hline & \$ 18,540 & \$ 12,300 & \$ 6,240 & & & \$ 10,700 \\\hline\end{array}$$
-Refer to Table 7-8 at the end of January, what was the balance in accounts receivable?

• A)$9,200
• B)$14,200
• C)$7,960
• D)$8,000

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Definitions:

Externalities

Costs or benefits that affect a party who did not choose to incur that cost or benefit, often leading to market failures.

Private Sector

The part of the economy that is run by individuals and companies for profit and is not state controlled.

Transaction Costs

Transaction costs are the expenses incurred in buying or selling goods or services, which can include search and information costs, bargaining costs, and enforcement costs.

Optimal Pigouvian Tax

A tax designed to correct the inefficiencies in a market that experiences externalities, set at a level that equates the marginal social cost of the externality with the marginal social benefit.