| A | B |
|---|
| General Journal | A journal with two amount columns in which all kinds of entries can be recorded |
| Every transaction can be recorded in a special journal. | FALSE |
| The source document for a store supplies on account is recorded in which journal? | General |
| Transaction: Bought store supplies on account. What is the debit? | Supplies--Store |
| Transaction: Bought store supplies on account. What is the credit? | Accounts Payable--Vendor Name |
| Transaction: Bought store supplies on account. What is the source document? | Memorandum |
| Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer’s account payable to the vendor, is called a | Purchases return |
| Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer’s account payable to the vendor, is called a | Purchases Allowance |
| A form prepared by the customer showing the price deduction taken by the customer for a return or an allowance is called a | Debit Memorandum |
| A debit memorandum is called a debit memorandum because the customer records the amount | as a debit to the vendor’s account. |
| Using a debit memorandum as a source document for a purchases returns and allowances transaction is an application of which accounting concept? | Objective Evidence |
| Merchandise returns and purchase allowances | decrease the total value of merchandise purchased. |
| The normal account balance of Purchases Returns and Allowances | is a credit. |
| Both Purchases and Purchases Returns and Allowances are listed | in the Cost of Goods Sold division of the chart of accounts. |
| An entry in the general journal that affects Accounts Payable, a general ledger account, also affects | a vendor’s account in the accounts payable ledger. |
| In a computerized accounting system, transactions are posted | immediately after they are entered. |
| In a manual accounting system, general journal transactions may be posted | immediately, at the end of each day, or less frequently. |
| Credit allowed to a customer for the sales price of returned merchandise, resulting in a decrease in the accounts receivable of the merchandising business, is called a | Sales Return |
| Credit allowed to a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the accounts receivable of the merchandising business, is called a | Sales Allowance |
| A form prepared by the vendor showing the amount deducted for returns and allowances is called a | Credit Memorandum |
| Sales Returns and Allowances is a contra account to the revenue account | Sales |
| The normal account balance of Sales Returns and Allowances is a | Debit |
| Both Sales and Sales Returns and Allowances are listed in the | Revenue division of the chart of accounts. |
| True/False: Errors may be made in recording amounts in subsidiary ledgers that do not affect the general ledger controlling account. | True |
| A single owners’ equity account that is used for the investment of all owners is called | Capital Stock |
| An amount earned by a corporation and not yet distributed to stockholders is called | Retained Earnings |
| Earnings distributed to stockholders are called | Dividends |
| A corporation’s dividend account is a temporary account similar to which proprietorship account? | Drawing |
| Each time a dividend is declared, the stockholders’ equity account, Dividends, is | debited. |
| At the end of each fiscal period, the balance in Dividends is closed to | Retained Earnings |
| A group of persons elected by the stockholders to govern a corporation is called the | Board of Directors |
| Action by a board of directors to distribute corporate earnings to stockholders is called | declaring a dividend |
| Dividends are normally declared on one date and paid | on a later date. |
| A dividend cannot exceed the balance of the | retained earnings |
| The stockholders’ equity account, Dividends, | increases by a debit. |
