Deck 11: Using a General Journal

Question 1

The correcting entry to correct a sale on account recorded to the wrong customer in the sales journal involves Accounts Receivable and the subsidiary ledger accounts.

Answer 1

False

Question 2

Net income increases a corporation's total stockholders' equity.

Answer 2

True

Question 3

A corporation's Dividends account is a temporary account.

Answer 3

True

Question 4

The normal account balance of Purchases Returns and Allowances is a debit.

Question 5

An entry in the general journal that affects Accounts Payable also affects a vendor's account in the accounts payable ledger.

Question 6

A corporation can decide if and when to declare a dividend.

Question 7

A sales return that credits the customer's account is recorded in the general journal.

Question 8

Credit allowed for part of the purchase price of merchandise that is not returned does not change the balance of the customer's accounts payable.

Question 9

A credit memorandum prepared by a customer results in the customer recording a debit to the vendor account.

Question 10

An entry recorded in a general journal will increase the account debited and decrease the account credited.

Question 11

A general journal entry posted to Accounts Payable will also be posted to an accounts payable account.

Question 12

Dividends can be distributed to stockholders only by formal action of a corporation's board of directors.

Question 13

In a computerized accounting system, transactions recorded on a general journal are posted at the end of the month.

Question 14

A completed general journal page should always be reviewed to be sure that all postings have been made.

Question 15

A credit memorandum issued by a vendor results in the vendor recording a credit to the customer's account.

Question 16

The stockholders' equity account, Dividends, has a normal credit balance.

Question 17

Entries in the general journal only affect account balances in general ledger accounts.

Question 18

Most corporations pay dividends by writing checks to stockholders on the day after the dividends are declared.

Question 19

Transactions that cannot be recorded in a special journal are recorded in a general journal.

Question 20

A return of merchandise to the vendor results in a

A) debit to Purchases.
B) credit to Purchases Returns and Allowances.
C) credit to Purchases.
D) debit to Purchases Returns and Allowances.

Question 21

The purchase of supplies on account results in a

A) credit to Accounts Payable.
B) credit to Accounts Payable and the vendor's accounts payable account.
C) debit to Accounts Payable.
D) debit to Accounts Payable and the vendor's accounts payable account.

Question 22

A customer notifies the vendor that purchased merchandise is damaged and cannot be sold at the normal price. Any credit granted to the customer would be called a

A) sales return.
B) purchases allowance.
C) sales allowance.
D) none of these.

Question 23

A correction of a transaction posted to the wrong customer account results in

A) a credit to Accounts Payable.
B) a debit and credit to Accounts Payable.
C) a debit to Accounts Payable.
D) none of these.

Question 24

At the end of the fiscal period, the balance of Dividends is closed to

A) Retained Earnings.
B) Income Summary.
C) Dividends Payable.
D) none of these.

Question 25

The amount of a dividend is normally calculated as

A) the number of shares outstanding multiplied by a percentage dividend rate.
B) a percentage of the balance in Common Stock.
C) the number of shares outstanding multiplied by a dollar amount per share.
D) the balance of Retained Earnings.

Question 26

Which of the following stockholders' equity accounts has a normal debit balance?

A) Capital Stock
B) Dividends
C) Paid-in Capital in Excess of Par
D) Income Summary

Question 27

Dividends is a temporary account of a corporation and is similar to which proprietorship account?

A) Equity.
B) Contributed Capital.
C) Drawing.
D) none of these.

Question 28

Select the one term that best fits each definition

-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.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 29

Select the one term that best fits each definition

-A form prepared by the vendor showing the amount deducted for returns and allowances.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 30

Select the one term that best fits each definition

-A group of persons elected by the stockholders to govern a corporation.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 31

Select the one term that best fits each definition

-Action by a board of directors to distribute corporate earnings to stockholders.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 32

Select the one term that best fits each definition

-A journal with two amount columns in which all kinds of entries can be recorded.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 33

Select the one term that best fits each definition

-Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's account payable to the vendor.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 34

Select the one term that best fits each definition

-Credit allowed to a customer for the sales price of returned merchandise, resulting in a decrease in the accounts receivable of the merchandising business.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 35

Select the one term that best fits each definition

-A form prepared by the customer showing the price deduction taken by the customer for a return or an allowance.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 36

Select the one term that best fits each definition

-Earnings distributed to stockholders.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 37

Select the one term that best fits each definition

-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.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return

Question 38

Select the one term that best fits each definition

-An amount earned by a corporation and not yet distributed to stockholders.

A) board of directors
B) credit memorandum
C) debit memorandum
D) declaring a dividend
E) dividends
F) general journal
G) purchases allowance
H) purchases return
I) retained earnings
J) sales allowance
K) sales return