Ch. 11 Accounting True/False
20. Most corporations pay a dividend by writing a single check to an agent, such as a bank, that distributes checks to individual stockholders. (p. 334)
True
4. A debit memorandum prepared by a customer results in the customer recording a debit to the vendor account. (p. 322)
True
7. An entry in the general journal that affects Accounts Payable also affects a vendor's account in the accounts payable ledger. (p. 324)
True
8. In a computerized accounting system, transactions recorded in a general journal are posted immediately after they are entered. (p. 325)
True
9. A completed general journal page should always be reviewed to be sure that all postings have been made. (p. 325)
True
19. The stockholders' equity account, Dividends, has a normal debit balance. (p. 333)
True
2. A general journal entry posted to Accounts Payable will also be posted to a subsidiary ledger account. (p. 321)
True
12. A sales return that credits the customer's account is not recorded in a cash receipts journal because the transaction does not involve cash. (p. 328)
True
10. A credit memorandum issued by a vendor results in the vendor recording a debit to the customer's account. (p. 327)
False
13. Entries in the general journal only affect account balances in general ledger accounts. (p. 329)
False
16. A corporation's dividend account is a permanent account similar to a proprietorship's drawing account. (p. 332)
False
17. Dividends can be distributed to stockholders only by formal action of a corporation's chief financial officer. (p. 333)
False
18. All corporations are required to declare dividends. (p. 333)
False
3. Credit allowed for part of the purchase price of merchandise that is not returned results in an increase in the customer's account. (p. 322)
False
5. An entry recorded in a general journal will either increase all accounts or decrease all accounts affected by the entry. (p. 323)
False
6. The normal account balance of Purchases Returns and Allowances is a debit. (p. 323)
False
14. The correcting entry to correct a sale on account recorded to the wrong customer in the sales journal involves only subsidiary ledger accounts. (p. 330)
True
15. Net income increases a corporation's total stockholders' equity. (p. 332)
True
1. Transactions that cannot be recorded in a special journal are recorded in a general journal. (p. 320)
True
11. The normal account balance of Sales Returns and Allowances is a debit. (p. 327)
True
