accounting chapter 9

An account in a general ledger that summarizes all accounts in a subsidiary ledger.

Controlling account

T/F: A merchandising business places Purchases in the Operating Expenses section of the income statement.

False

T/F: The contra account Purchases Discount has a normal debit balance.

False

Since contra accounts are offsets to their related accounts, contra account normal balances are ___________________________________.

Opposite the normal balances of their related accounts

An employee working with an account can trace a translation back to the correct journal by using information in the __________________ column.

Post. Ref.

T/F: The terms of sale 1/10, n/30 means that 1/10 or 10% of the invoice amount may be deducted if paid within 30 days.

false

T/F: The total of a schedule of accounts payable less purchases discounts taken during the month will equal the total of Accounts Payable

false

TF: A transaction to record merchandise purchased with a trade discount would include a debit to Merchandise Discount.

false

A purchase of merchandise for cash would be posted __________________________________.

individually to purchases

A merchandise inventory evaluated at the end of a fiscal period.

periodic inventory

An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise.

perpetual inventory

A periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand is called __________________________.

physical inventory

A merchandising business that sells to those who use or consume the goods.

retail mechandising

Supplies bought for use in a business are recorded in what account?

supplies account

T/F: A corporation exists independent of its owners.

true

T/F: The periodic inventory method does not require records of the quantity and cost of individual goods.

true

T/F: The total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable.

true

A business that buys and resells merchandise primarily to other merchandising businesses.

wholesale merchandising business

Merchandise with a list price of $1,000.00 is purchased on account for $700.00 on June 1. Terms of sale are 2/10, n/30. Payment is made of June 17. The amount paid should be __________________________.

700

An agreement between a buyer and a seller about payment for merchandise.

Terms of sale

T/F: A corporation can own property, incur liabilities, and enter into contracts in its own name.

True

T/F: The petty cash account Cash Short and Over is a temporary account.

True

To replenish a $500.00 petty cash fund, if the petty cash custodian had receipts totaling $275.00 and cash of $220.00 in the petty cash box, what is the entry made to Cash Short and Over?

a debit of $5.00

An account that reduces a related account on a financial statement.

contra account

The Purchases account is classified as ________________

cost of goods sold account