Ch. 15 accounting true or false

Accounts in the accounts payable subsidiary ledger have normal debit balances.

False

An invoice with terms of 2/10, n/30, dated June 17, must be paid by July 17 in order to take advantage of the cash discount.

False

Every purchase on account results in a debit to Accounts Payable.

False

Purchases Discounts is a contra account of Sales Discounts.

False

The Purchases account is a permanent account.

False

The balance of the Purchases Returns and Allowances account increases the Purchases account.

False

The decrease side of the Purchases Returns and Allowances account is a credit.

False

When journalizing a return of merchandise purchased on account, the subsidiary ledger account is written first, followed by a diagonal line and the general ledger controlling account.

False

A discount period begins on the date the charge customer receives the invoice.

False

A purchases returns and allowances transaction is posted only to the accounts payable subsidiary ledger

False

The Purchases account is increased by debits.

True

The Purchases account is used only to record the purchases of merchandise for resale.

True

The Transportation In account is classified as a cost of merchandise account.

True

A tickler file contains folders for each day of the month so invoices can be placed in the folders according to their due dates.

True

In a computerized accounting system, processing purchases on account is done in a manner similar to a manual system.

True

Purchases Returns and Allowances appears in the cost of merchandise section of the chart of accounts.

True

Shipping charges are considered to be a cost of merchandise.

True