accounting chapter 9
An account in a general ledger that summarizes all accounts in a subsidiary ledger.
Controlling account
T/F: A merchandising business places Purchases in the Operating Expenses section of the income statement.
False
T/F: The contra account Purchases Discount has a normal debit balance.
False
Since contra accounts are offsets to their related accounts, contra account normal balances are ___________________________________.
Opposite the normal balances of their related accounts
An employee working with an account can trace a translation back to the correct journal by using information in the __________________ column.
Post. Ref.
T/F: The terms of sale 1/10, n/30 means that 1/10 or 10% of the invoice amount may be deducted if paid within 30 days.
false
T/F: The total of a schedule of accounts payable less purchases discounts taken during the month will equal the total of Accounts Payable
false
TF: A transaction to record merchandise purchased with a trade discount would include a debit to Merchandise Discount.
false
A purchase of merchandise for cash would be posted __________________________________.
individually to purchases
A merchandise inventory evaluated at the end of a fiscal period.
periodic inventory
An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise.
perpetual inventory
A periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand is called __________________________.
physical inventory
A merchandising business that sells to those who use or consume the goods.
retail mechandising
Supplies bought for use in a business are recorded in what account?
supplies account
T/F: A corporation exists independent of its owners.
true
T/F: The periodic inventory method does not require records of the quantity and cost of individual goods.
true
T/F: The total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable.
true
A business that buys and resells merchandise primarily to other merchandising businesses.
wholesale merchandising business
Merchandise with a list price of $1,000.00 is purchased on account for $700.00 on June 1. Terms of sale are 2/10, n/30. Payment is made of June 17. The amount paid should be __________________________.
700
An agreement between a buyer and a seller about payment for merchandise.
Terms of sale
T/F: A corporation can own property, incur liabilities, and enter into contracts in its own name.
True
T/F: The petty cash account Cash Short and Over is a temporary account.
True
To replenish a $500.00 petty cash fund, if the petty cash custodian had receipts totaling $275.00 and cash of $220.00 in the petty cash box, what is the entry made to Cash Short and Over?
a debit of $5.00
An account that reduces a related account on a financial statement.
contra account
The Purchases account is classified as ________________
cost of goods sold account