Accounting Unit 11 Trivia

declaring a dividend

action by a board of directors to distribute corporate earnings to stockholders

debit memorandum

A form prepared by the customer showing the price deduction taken by the customer for a return or an allowance

credit memorandum

A form prepared by the vendor showing the amount deducted for returns and allowances

board of directors

A group of persons elected by the stockholders to govern a corporation

general journal

A journal with two amount columns in which all kinds of entries can be recorded

retained earnings

An amount earned by a corporation and not yet distributed to stockholders

purchases allowance

Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease of the customer's account payable to the vendor

purchases return

Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's account payable to the vendor

sales allowance

Credit allowed to a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the accounts receivable of the merchandising business

sales return

Credit allowed to a customer for the sales price of returned merchandise, resulting in a decrease in the accounts receivable of the merchandising business

false

(T/F) the normal account balance of purchases returns and allowances is a debit

false

(T/F) the stockholders' equity account, Dividends, has a normal credit balance

true

(T/F) A completed general journal page should always be reviewed to be sure that all postings have been made.

true

(T/F) A corporation's Dividends account is a temporary account.

true

(T/F) A general journal entry posted to Accounts Payable will also be posted to an accounts payable account

false

(T/F) An entry recorded in a general journal will increase the account debited and decrease the account credited.

false

(T/F) Entries in the general journal only affect account balances in general ledger accounts

false

(T/F) The correcting entry to correct a sale on account recorded to the wrong customer in either sales journal involves accounts receivable and subsidiary ledger accounts

false

(T/F) The normal account balance of Sales Returns and Allowances is a credit

true

(T/F) Transactions that cannot be recorded in a special journal are recorded in a general journal

true

(T/F) a corporation can decide if and when to declare a dividend

true

(T/F) a credit memorandum issued by a vendor results in vendor recording a credit to the customer account

true

(T/F) a sales return that credits the customers' account is recorded in the general journal

true

(T/F) net income increases a corporation's total stockholder equity