Mindtap Chapter 11 Test Accounting

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The correcting entry to correct a sale on account recorded to the wrong customer sales journal involves Accounts Receivable and the subsidiary ledger accounts

False

The normal account balance of Purchases Returns and Allowances is a debit

False

The normal account balance of Sales Returns and Allowances is a credit

False

The stockholder's equity account, Dividends, has a normal credit balance

False

At the end of the fiscal period, the balance of Dividends is closed to a

Retained Earnings

The amount of a dividend is normally calculated as

The number of shares outstanding multiplied by a dollar amount per share

A completed general journal page should always be reviewed to be sure that all postings have been made

True

A corporation can decide if and when to declare a dividend

True

A corporation's Dividends account is a temporary account

True

A credit memo issued by a vendor results in the vendor recording a credit to the customer's account

True

A general journal entry posted to Accounts Payable will also be posted to an accounts payable account

True

A sales return that credits the customer's account is recorded in the general journal

True

An entry in the general journal that affects Accounts Payable also affects a vendor's account in the accounts payable ledger.

True

Dividends can be distributed to stockholders only by formal action of a corporation's board of directors

True

Net income increases a corporation's total stockholders' equity.

True

Transactions that cannot be recorded in a special journal are recorded in a general journal

True

The purchase of supplies on account results in a

credit to Accounts Payable and the vendor's accounts payable account

A return of merchandise to the vendor results in a

credit to purchases returns and allowances

A correction of a transaction posted to the wrong customer account results in

none of these

A customer notifies the vendor that purchased merchandise is damaged and cannot be sold at the normal price. Any credit granted to the customer would be called a

sales allowance

Which of the following stockholders' equity accounts has a normal debit balance?

Dividends

Dividends is a temporary account of a corporation and is similar to which proprietorship account?

Drawing

A credit memo prepared by a customer results in the customer recording a debit to the vendor account

False

An entry recorded in a general journal will increase the account debited and decrease the account credited

False

Credit allowed for part of the purchase price of merchandise that is not returned does not change the balance of the customer's accounts payable

False

Entries in the general journal only affect account balances in general ledger accounts

False

In a computerized accounting system, transactions recorded on a general journal are posted at the end of the month

False

Most corporations pay dividends by writing checks to stockholder on the day after the dividends are declared

False


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