accounting chapter 11 Flashcards
general journal
A journal with two amount columns in which all kinds of entries can be recorded.
purchases return
Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer’s account payable to the vendor.
purchases allowance
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.
debit memorandum
A form prepared by the customer showing the price deduction taken by the customer for a return or an allowance.
sales return
credit allowed to a customer for the sales price of returned merchandise, resulting in a decrease in the accounts receivable of the merchandising business
sales allowance
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.
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.
dividends
Earnings distributed to stockholders.
board of directors
A group of persons elected by the stockholders to govern a corporation.
declaring a dividend
Action by a board of directors to distribute corporate earnings to stockholders.
internal controls
Processes and procedures employed within a business to ensure that its operations are conducted ethically, accurately, and reliably.
Transactions that cannot be recorded in a special journal are recorded in a general journal.
true
A general journal entry posted to Accounts Payable will also be posted to a subsidiary ledger account.
true
Credit allowed for part of the purchase price of merchandise that is not returned results in an increase in the customer’s account.
false
A debit memorandum prepared by a customer results in the customer recording a debit to the vendor account.
true
An entry recorded in a general journal will either increase all accounts or decrease all accounts affected by the entry.
false
The normal account balance of Purchases Returns and Allowances is a debit.
false
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
A completed general journal page should always be reviewed to be sure that all postings have been made.
false
A credit memorandum issued by a vendor results in the vendor recording a debit to the customer’s account.
false
The normal account balance of Sales Returns and Allowances is a debit.
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
Entries in the general journal only affect account balances in general ledger accounts.
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
Net income increases a corporation’s total stockholders’ equity.
true
A corporation’s Dividends account is a permanent account similar to a proprietorship’s drawing account.
false
Dividends can be distributed to stockholders only by formal action of a corporation’s chief financial officer.
false
All corporations are required to declare dividends.
false
The stockholders’ equity account, Dividends, has a normal debit balance.
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
internal controlsTransactions that cannot be recorded in a special journal are recorded in a general journal.
true
