Question 1

Which of the following is a TRUE statement concerning Credit Memorandums?

Accepted Answer

A)  Results in a decrease in Sales Returns and Allowances 
B)  Results in an increase in Sales Returns and Allowances 
C)  Increases sales 
D)  Has no effect on net sales 
A)  Results in a decrease in Sales Returns and Allowances 
B)  Results in an increase in Sales Returns and Allowances 
C)  Increases sales 
D)  Has no effect on net sales B

Question 2

Refer to the Fruit & Company question above. What amount would the XYZ Company owe at month end, assuming no payments were received?

Accepted Answer

$2,300

Question 3

Receipts of cash should generally be recorded in the Cash Receipts Journal.

Accepted Answer

A) True 
 B)False  True

Question 4

Accounts in the accounts receivable subsidiary ledger are listed in order of how much is owed.

Accepted Answer

A) True 
 B)False

Question 5

The collection on account within the 2/10 n/30 discount period was recorded using a 10% discount rather than a 2% discount in both the controlling and subsidiary accounts. This error will cause

Accepted Answer

A)  the net income for the period to be understated. 
B)  the net income for the period to be overstated. 
C)  the control account to not agree with the subsidiary ledger. 
D)  the assets to be overstated. 
A)  the net income for the period to be understated. 
B)  the net income for the period to be overstated. 
C)  the control account to not agree with the subsidiary ledger. 
D)  the assets to be overstated.

Question 6

Accounts of a single type are kept in this ledger.

Accepted Answer

A)  supplemental ledger. 
B)  additional ledger. 
C)  subsidiary ledger. 
D)  None of these answers are correct. 
A)  supplemental ledger. 
B)  additional ledger. 
C)  subsidiary ledger. 
D)  None of these answers are correct.

Question 7

A special journal, like the Sales Journal, requires more posting than the general journal because the general journal has special column totals.

Accepted Answer

A) True 
 B)False

Question 8

Returning damaged products to a supplier

Accepted Answer

A)  reduces inventory. 
B)  increases inventory. 
C)  reduces cost of goods sold. 
D)  increases cost of goods sold. 
A)  reduces inventory. 
B)  increases inventory. 
C)  reduces cost of goods sold. 
D)  increases cost of goods sold.

Question 9

The following are transactions for Brian for the month of October. Indicate how the following transactions would be recorded by completing the necessary journal entries as appropriate using the perpetual inventory system (omit explanations).
Oct. 1 Brian invested $15,000 in his business.
Oct. 3 Sold $2,500 of merchandise on account to H. Holand, sales invoice No. 1, terms 1/10, n/30, cost $2,000.
Oct. 5 Sold $1,200 of merchandise on account to T. Traer, sales invoice No. 2, terms 1/10, n/30, cost $1,000.
Oct. 13 Received cash from H. Holand in payment for October 3 transaction, less the discount.
Oct. 14 Issued credit memorandum No. 1 to T. Traer for $100 for merchandise returned in good condition from October 5 sale on account, cost $80.
Oct. 15 Received cash from T. Traer for the amount due, less the discount.
GENERAL JOURNAL
             Date                      Account Tiles and Description       PR       Debit       Credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
 GENERAL LEDGER $$\text { Cash } 101$$ $$\text { Inventory } 110$$ $$\text { Sales Discount } 402$$ $$\text { Brad. Cap } 301$$ $$\text { Accounts Rec } 102$$ $$\text { Sales } 401$$ $$\text { Sales Ret.and All. } 403$$ $$\text { Cost of Goods Sold } 501$$ SUBSIDIARY LEDGER $$\text { H. Holand }$$ $$\text { T. Traer }$$

Accepted Answer

GENERAL JOURNAL
 @#IMG-DLM& GE

Question 10

Kristi's pottery sold 250 tiles at $25.00 each to a charge customer, terms 1/10, n/30. The tiles cost Kristi's $10.00 each. Which entry is required to record the sale portion of this transaction?

Accepted Answer

A)  Debit Cash for $6,250; credit Tile Sales for $6,250 
B)  Debit Accounts Receivable for $6,187.50; credit Tile Sales for $6,187.50 
C)  Debit Accounts Receivable for $6,187.50; debit Sales Discount for $62.50, and credit Tile Sales for $6,250 
D)  Debit Accounts Receivable for $6,250; credit Tile Sales for $6,250 
A)  Debit Cash for $6,250; credit Tile Sales for $6,250 
B)  Debit Accounts Receivable for $6,187.50; credit Tile Sales for $6,187.50 
C)  Debit Accounts Receivable for $6,187.50; debit Sales Discount for $62.50, and credit Tile Sales for $6,250 
D)  Debit Accounts Receivable for $6,250; credit Tile Sales for $6,250

Question 11

The balance in the Accounts Receivable account is $2,100 debit. Therefore, the balances in the subsidiary ledger should be $2,100.

Accepted Answer

A) True 
 B)False

Question 12

Recording to the accounts receivable ledger is done

Accepted Answer

A)  daily. 
B)  monthly. 
C)  bi-weekly. 
D)  when requested. 
A)  daily. 
B)  monthly. 
C)  bi-weekly. 
D)  when requested.

Question 13

Recording to the accounts receivable ledger should be performed at the end of the month.

Accepted Answer

A) True 
 B)False

Question 14

Sold merchandise on account would be recorded with

Accepted Answer

A)  a debit to an asset account. 
B)  a debit to a liability account. 
C)  a debit to Capital. 
D)  None of these are correct. 
A)  a debit to an asset account. 
B)  a debit to a liability account. 
C)  a debit to Capital. 
D)  None of these are correct.

Question 15

The Coral Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries using the perpetual inventory system. All sales are subject to credit terms of 1/10, n/30.
-July 28 Received full payment from Taylor Co.
________ ________ ________
________ ________ ________

Accepted Answer

Cash 5,000

Question 16

The return of merchandise by a credit customer was recorded with a debit to Accounts Payable and a credit to Accounts Receivable and the subsidiary ledger. This error will cause

Accepted Answer

A)  the net income for the period to be overstated. 
B)  the net income for the period to be understated. 
C)  the control account to not agree with the subsidiary ledger. 
D)  the assets to be overstated. 
A)  the net income for the period to be overstated. 
B)  the net income for the period to be understated. 
C)  the control account to not agree with the subsidiary ledger. 
D)  the assets to be overstated.

Question 17

Accounts of a single type (i.e., Accounts Receivable) are kept in this form of ledger.

Accepted Answer

A)  supplemental ledger 
B)  additional ledger 
C)  subsidiary ledger 
D)  general ledger 
A)  supplemental ledger 
B)  additional ledger 
C)  subsidiary ledger 
D)  general ledger

Question 18

A checkmark is placed in the PR column to show an amount has been posted to a subsidiary account.

Accepted Answer

A) True 
 B)False

Question 19

The purpose of the accounts receivable subsidiary ledger includes all of the following except

Accepted Answer

A)  to keep a running balance of creditor's accounts. 
B)  to keep a running balance of each customer's account. 
C)  to provide supporting information for the general ledger control account. 
D)  to provide information to help collect the customer's account. 
A)  to keep a running balance of creditor's accounts. 
B)  to keep a running balance of each customer's account. 
C)  to provide supporting information for the general ledger control account. 
D)  to provide information to help collect the customer's account.

Question 20

Service companies must keep careful track of the cost of inventory.

Accepted Answer

A) True 
 B)False

Which of the following is a TRUE statement concerning Credit Memorandums?

Refer to the Fruit & Company question above. What amount would the XYZ Company owe at month end, assuming no payments were received?

Receipts of cash should generally be recorded in the Cash Receipts Journal.

Accounts in the accounts receivable subsidiary ledger are listed in order of how much is owed.

The collection on account within the 2/10 n/30 discount period was recorded using a 10% discount rather than a 2% discount in both the controlling and subsidiary accounts. This error will cause

Accounts of a single type are kept in this ledger.

A special journal, like the Sales Journal, requires more posting than the general journal because the general journal has special column totals.

Returning damaged products to a supplier

Kristi's pottery sold 250 tiles at $25.00 each to a charge customer, terms 1/10, n/30. The tiles cost Kristi's $10.00 each. Which entry is required to record the sale portion of this transaction?

The balance in the Accounts Receivable account is $2,100 debit. Therefore, the balances in the subsidiary ledger should be $2,100.

Recording to the accounts receivable ledger is done

Recording to the accounts receivable ledger should be performed at the end of the month.

Sold merchandise on account would be recorded with

The Coral Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries using the perpetual inventory system. All sales are subject to credit terms of 1/10, n/30. -July 28 Received full payment from Taylor Co.

The return of merchandise by a credit customer was recorded with a debit to Accounts Payable and a credit to Accounts Receivable and the subsidiary ledger. This error will cause

Accounts of a single type (i.e., Accounts Receivable) are kept in this form of ledger.

A checkmark is placed in the PR column to show an amount has been posted to a subsidiary account.

The purpose of the accounts receivable subsidiary ledger includes all of the following except

Service companies must keep careful track of the cost of inventory.

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters

Exam 6: Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Which of the following is a TRUE statement concerning Credit Memorandums?

Refer to the Fruit & Company question above. What amount would the XYZ Company owe at month end, assuming no payments were received?

Receipts of cash should generally be recorded in the Cash Receipts Journal.

Accounts in the accounts receivable subsidiary ledger are listed in order of how much is owed.

The collection on account within the 2/10 n/30 discount period was recorded using a 10% discount rather than a 2% discount in both the controlling and subsidiary accounts. This error will cause

Accounts of a single type are kept in this ledger.

A special journal, like the Sales Journal, requires more posting than the general journal because the general journal has special column totals.

Returning damaged products to a supplier

Kristi's pottery sold 250 tiles at $25.00 each to a charge customer, terms 1/10, n/30. The tiles cost Kristi's $10.00 each. Which entry is required to record the sale portion of this transaction?

The balance in the Accounts Receivable account is $2,100 debit. Therefore, the balances in the subsidiary ledger should be $2,100.

Recording to the accounts receivable ledger is done

Recording to the accounts receivable ledger should be performed at the end of the month.

Sold merchandise on account would be recorded with

The return of merchandise by a credit customer was recorded with a debit to Accounts Payable and a credit to Accounts Receivable and the subsidiary ledger. This error will cause

Accounts of a single type (i.e., Accounts Receivable) are kept in this form of ledger.

A checkmark is placed in the PR column to show an amount has been posted to a subsidiary account.

The purpose of the accounts receivable subsidiary ledger includes all of the following except

Service companies must keep careful track of the cost of inventory.

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Banking Procedures and Control of Cash

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters