Accounting II: Chapter 11
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
Credit Memorandum
A form prepared by the vendor showing the amount deducted for returns and allowances
Retained Earnings
An amount earned by a corporation and not yet distributed to stockholders.
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
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 account. (C) debit to Accounts Payable. (D) debit to Accounts Payable and the vendor's accounts payable account.
B
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
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
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
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
Purchases Returns
Credit allowed for the purchase of returned merchandise, resulting in a decrease in the customer's account payable to the vendor
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
Dividends
Earnings distributed to stockholders
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
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 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
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
General Journal
a journal with two amount columns in which all kinds of entries can be recorded
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
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