Accounting 11

The correcting entry to correct a sale on account recorded to the wrong customer in the 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 stockholders' equity account, Dividends, has a normal credit balance.

False

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

General Journal

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

Purchases Allowance

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

Purchases Return

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

Retained Earnings

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 Allowance

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

Sales Return

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 memorandum 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

Earnings distributed to stockholders.

dividends

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

Board of Directors

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

Credit Memorandum

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

Debit Memorandum

Action by a board of directors to distribute corporate earnings to stockholders.

Declaring a Dividend

A credit memorandum 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 stockholders on the day after the dividends are declared.

False

At the end of the fiscal period, the balance of Dividends is closed to (A) Retained Earnings. (B) Income Summary. (C) Dividends Payable. (D) none of these.

(A) Retained Earnings

The purchase of supplies on account results in a (A) credit to Accounts Payable. (B) credit to Accounts Payable and the vendor's accounts payable accounts. (C) debit to Accounts Payable. (D) debit to Accounts Payable and the vendor's accounts payable accounts.

(B) Credit to Accounts Payable and the vendor's accounts payable accounts.

Which of the following stockholders' equity accounts has a normal debit balance? (A) Capital Stock. (B) Dividends. (C) Paid-in Capital in Excess of Par. (D) Income Summary.

(B) Dividends

A return of merchandise to the vendor results in a (A) debit to Purchases. (B) credit to Purchases Returns and Allowances. (C) credit to Purchases. (D) debit to Purchases Returns and Allowances.

(B) credit to Purchases Returns and Allowances

Dividends is a temporary account of a corporation and is similar to which proprietorship account? (A) Equity. (B) Contributed Capital. (C) Drawing. (D) none of these.

(C) Drawing

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 (A) sales return. (B) purchases allowance. (C) sales allowance. (D) none of these.

(C) Sales allowance

The amount of a dividend is normally calculated as (A) the number of shares outstanding multiplied by a percentage dividend rate. (B) a percentage of the balance in Common Stock. (C) the number of shares outstanding multiplied by a dollar amount per share. (D) the balance of Retained Earnings.

(C) the number of shares outstanding multiplied by a dollar amount per share.

A correction of a transaction posted to the wrong customer account results in (A) a credit to Accounts Payable. (B) a debit and credit to Accounts Payable. (C) a debit to Accounts Payable. (D) none of these.

(D) none of these