ACCT CH 7

On Mar. 30, Sparky's sold $1,500 of merchandise to The Toy Warehouse on account. Demonstrate how to record this transaction into a sales journal assuming that Sparky's originally paid $550 for the merchandise and a perpetual inventory system is used.

$1,500 is entered into the Sales Cr./Accounts Receivable Dr. column.

A partial Sales Journal for ABC Co. is shown below. Show how to post these transactions into the general ledger by selecting the correct actions below. (Check all that apply.)

A $4,500 credit is posted to the Sales account in the general ledger. An "S" is posted in the PR columns of the general ledger after posting is completed. An $1,100 debit is posted to the Cost of Goods Sold account in the general ledger. The account number of the Sales account is entered below the Accounts Receivable Dr./Sales Cr. column.

When posting from the sales journal to the individual accounts in the accounts receivable ledger: (Check all that apply).

A check mark is used instead of account numbers because customer accounts are arranged alphabetically in the accounts receivable ledger. A check mark is entered in the Sales Journal's PR column.

Review the statements below and choose the one that is correct regarding a schedule of accounts receivable.

A schedule of accounts receivable is a list of customer accounts and balances prepared to prove the balance in the Accounts Receivable account.

Identify common subsidiary ledgers created and used by businesses. (Check all that apply.)

Accounts receivable subsidiary ledger Equipment subsidiary ledger Accounts payable subsidiary ledger

Show your understanding of the posting procedure from a sales journal to the general ledger by selecting the correct statements below.

After posting column totals to the general ledger, the general ledger account numbers are entered below the column totals of the sales journal. The sales journal's account columns are totaled at the end of the period, and these totals are posted to the general ledger. The total of the Accounts Receivable Dr./Sales Cr. column is posted as a credit to the Sales account in the general ledger. The total of the Accounts Receivable Dr./Sales Cr. column is posted as a debit to the Accounts Receivable account in the general ledger.

What are the typical columns that would appear in a special sales journal? (Check all that apply.)

Customer Account Debited Cost of Goods Sold Dr./Inventory Cr. Sales Cr./Accounts Receivable Dr. Invoice number Date

Review the transactions listed below and determine the ones that would be recorded in a special cash receipts journal. (Check all that apply.)

Equipment sold for cash Cash sales Cash from credit customers in payment of their accounts

Show your understanding of an accounts receivable ledger by selecting the correct statements below. (Check all that apply.)

Every transaction that impacts a customer account will also impact the general ledger Accounts Receivable account. The accounts receivable subsidiary ledger is a supporting record of all customer accounts in the company. The total of the accounts receivable subsidiary ledger will also be the total in the Accounts Receivable account in the general ledger. The Accounts Receivable account in the general ledger is the control account of the accounts receivable subsidiary ledger.

Determine which of the following statements are correct descriptions of a subsidiary ledger. (Check all that apply.)

It is a supporting ledger that contains detailed information about a general ledger account. The balance in the subsidiary ledger will equal the balance of its supported account in the general ledger. Two of the most common subsidiary ledgers are for Accounts Payable and Accounts Receivable. The account which the subsidiary ledger supports in the general ledger is called a control account.

On Jan. 15, ABC Co. sold a piece of land for $4,000 when the original cost of the land was $4,000. Show how to journalize the transaction into the cash receipts journal by selecting all of the correct actions below. (Check all that apply.)

Land is entered into the Account Credited column. Sold Land is entered in the Explanation column. $4,000 is entered into the Other Accounts Cr. column. $4,000 is entered in the Cash Dr. column.

Show your understanding of the posting procedure from a sales journal to a subsidiary ledger by selecting the correct statements below. (Check all that apply.)

Posting to individual customer accounts regularly keeps customer accounts up-to-date. After posting to a customer's account in the subsidiary ledger, check marks are entered in the sales journal's PR column. Individual transactions are posted daily to the customer accounts affected in the subsidiary ledger.

Determine which of the statements below are accurate regarding how to prove the accuracy of account balances in the general ledger and subsidiary ledgers after posting. (Check all that apply.)

Preparing a schedule of accounts receivable is one way to prove the accuracy of the general ledger and subsidiary ledger balances. The total of the schedule of accounts receivable should equal the balance of the Accounts Receivable account in the general ledger. If the total of the schedule of accounts receivable equals the balance in the control account, the subsidiary ledger is assumed correct. A trial balance of the general ledger is prepared to confirm that debits equal credits. A schedule of accounts receivable lists each customer and the balance owed.

Identify the advantages of using subsidiary ledgers. (Check all that apply.)

Provides up-to-date information readily available on specific customers and suppliers Allows removal of excessive details from the general ledger

Describe what a special journal is by selecting all of the correct statements below. (Check all that apply.)

Special journals allow an efficient division of labor. A special journal is used to record transactions of a certain type. It is a journal that has specific columns for accounts debited and credited. A special journal used as an alternative to only using a general journal.

How do you record sales returns and allowances in a company that uses special journals? (Check all that apply.)

The company can create a separate sales returns and allowances journal to record these types of transactions. The returns can be entered into the general journal.

Review the statements below and select the correct statements regarding the posting procedure from a sales journal to the subsidiary ledger. (Check all that apply.)

The sales journal's account columns are totaled at the end of the period. These totals are posted to the general ledger. Customer accounts in the sales journal are posted individually in the subsidiary ledger.

Show your understanding of an accounts payable subsidiary ledger by selecting the correct statements below. (Check all that apply.)

The total of the vendor accounts in the subsidiary ledger will also be the total in the Accounts Payable account in the general ledger. The accounts payable subsidiary ledger is a supporting record of all short-term vendor amounts owed in the company. Every credit transaction that impacts a vendor account will also impact the Accounts Payable account in the general ledger. Accounts Payable is the controlling account in the general ledger.

Describe the characteristics of using special journals. (Check all that apply.)

They are designed to meet the different needs of each business. They streamline the recording and posting processes. They allow for an efficient division of labor for certain types of transactions.

A subsidiary ledger can be described as:

a supporting record which contains detailed information on specific accounts in the general ledger