Mindtap Chapter 11 Test Accounting
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
