Chapter 11 Accounting
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
