Accounting Chapter 11 T/F

A corporation's Dividends account is a permanent account similar to a proprietorship's drawing account

False

A credit memorandum issued by a vendor results in the vendor recording a debit to the customer's account

False

All corporations are required to declare dividends

False

An entry recorded in a general journal will either increase all accounts or decrease all accounts affected by the entry

False

Credit allowed for part of the purchase price of merchandise that is not returned results in an increase in the customer's account

False

Dividends can be distributed to stockholders only by formal action of a corporation's chief financial officer

False

Entries in the general journal only affect account balances in general ledger accounts

False

The normal account balance of Purchases Returns and Allowances is a debit

False

A completed general journal page should always be reviewed to be sure that all postings have been made

True

A debit memorandum prepared by a customer results in the customer recording a debit to the vendor account

True

A general journal entry posted to accounts payable will also be posted to a subsidiary ledger account

True

A sales return that credits the customer's account is not recorded in a cash receipts journal because the transaction does not involve cash

True

An entry in the general journal that affects Accounts Payable also affects a vendor's account in the accounts payable ledger.

True

In a computerized accounting system, transactions recorded in a general journal are posted immediately after they are entered

True

Most corporations pay a dividend by writing a single check to an agent, such as a bank, that distributes checks to individual stockholders

True

Net income increases a corporation's total stockholders' equity.

True

The correcting entry to correct a sale on account recorded to the wrong customer in the sales journal involves only subsidiary ledger accounts

True

The normal account balance of Sales Returns and Allowances is a debit

True

The stockholders' equity account, Dividends, has a normal debit balance

True

Transactions that cannot be recorded in a special journal are recorded in a general journal

True