Chapter 11 Accounting

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credit memorandum

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

General Journal

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

retained earnings

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

Purchases return

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

False

T/F: A credit memorandum prepared by a customer results in the customer recording a debit to the vendor account

True

T/F: A general journal entry posted to Accounts Payable will also be posted to an accounts payable account

false

T/F: A normal account balance of purchases returns and allowance is a debit

False

T/F: An entry recorded in a general journal with increase accounts debited and decrease accounts credited

False

T/F: Credit allowed for part of the purchase price of merch that isnt returned doesnt change the balance of accounts payable

True

T/F: Dividends can be distributed to stockholders only by formal action of a corporations board of directors

false

T/F: Most corporations pay a dividend by writing checks to stockholders on day after dividends are declared

False

T/F: The correcting entry to correct a sale on account recorded to the wrong customer in the sales journal involves Account Recievable and the subsidiary ledger account

False

T/F: The stockholders equity account, dividends, has a normal credit balance

true

T/F: Transactions that cant be recorded in a special journal are recorded in a general journal

true

T/F: a completed general journal page should always be reviewed to be sure that all posting have been made

true

T/F: a corporations dividends account is a temporary account similar to a proprietorships drawing account

true

T/F: a credit memorandum issued by a vendor results in the vendor recording a credit to the customers account

true

T/F: a sales return that credits the customers account is recorded in the general journal

true

T/F: an entry in the general journal that affects accounts payable also affects a vendors account in the accounts payable ledger

false

T/F: entries in the general journal only affect account balances in general ledger accounts

false

T/F: in a computerized accounting system, transactions recorded in a general journal are posted at the end of the month

true

T/F: net income increases a corporations total stockholders

false

T/F: the normal account balance of sales returns and allowances is a credit

debit memorandum

a form prepared by the customer showing the price deduction taken by the customer for returns and allowances

board of directors

a group of persons elected by the stockholders to manage a corporation

declaring a dividend

action by a board of directors to distribute corporate earnings to stockholders

sales allowance

credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor's accounts receivable

sales return

credit allowed a customer for the sales price of returned merchandise, resulting in a decrease in the vendor's accounts receivable of a merch. business

purchases allowance

credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer's accounts payable

dividends

earnings distributed to stockholders

True

T/F: A corporation can decide if and when to declare a dividend


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