Chapter 7: Other Transactions

Question 1

Memo

Answer 1

an internal source document used to verify a transaction that does not involve cash and is not a sale, purchase or return of inventory

Question 2

Fair Value

Answer 2

The price of an asset contributed by the owner that would be received if that asset was sold at the time it was acquired by the business

Question 3

Commencing Entry

Answer 3

a General Journal entry to establish double-entry records by entering existing asset, liability and owner’s equity balances in the General Ledger accounts

Question 4

Correcting Entry

Answer 4

a General Journal entry to correct an error in the way a transaction is recorded in the General Journal or General Ledger

Question 5

Order form

Answer 5

a document issued by a business requesting the supply of inventory or other goods

Question 6

Order confirmation

Answer 6

A document issued by a the supplier confirming the receipt of an order (for inventory)

Question 7

Shipping confirmation

Answer 7

a document issued by the supplier confirming that inventory has been dispatched and is being shipped to the business

Question 8

Delivery Docket

Answer 8

A document issued by the supplier to accompany a deliver, listing the type and quantity of all items delivered