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chapter 9
accounting
| Question | Answer |
|---|---|
| The total of a schedule of accounts payable less purchases discounts taken during the month will equal the total of accounts payable. T/F | False |
| If the actual petty cash on hand is $53.00 but the records show that $55.00 should be on hand, the petty cash fund is said to be over. T/F | False |
| The terms of sale 1/10, n/30 mean that the customer may deduct 1% of the invoice amount if payment is made within 30 days of the invoice date. T/F | False |
| A corporation exists independent of its owners. T/F | True |
| The purchases account is increased by a credit and decreased by a debit. T/F | False |
| When supplies are purchased for use in the business, the amount is recorded in the purchases account. T/F | False |
| The contra account purchases discount has a normal debit balance. T/F | False |
| A merchandising business places Purchases in the Operating Expenses section of the income statement. T/F | False |
| A corporation can own property, incur liabilities, and enter into contracts in its own name. T/F | True |
| Purchases Discount is increased by a credit entry. T/F | True |
| A special journal used to record only purchases of merchandise on account is called a purchases journal. T/F | True |
| The total of accounts in the accounts payable subsidiary ledger equals the balance of the controlling account, Accounts Payable. T/F | True |
| The periodic inventory method does not require records of the quantity and cost of individual goods. | True |
| A cash payment journal is used to journalize: A. all cash transactions B. only cash payment transactions C. adjusting entries D. closing entries | B. Only cash payment transactions |
| The source document for a cash purchase is: A. a check B. a receipt C. a memorandum D. an invoice | A. a check |
| Special amount columns are used for transactions that occur: A. infrequently B. once a month C. frequently D. once during the fiscal year | C. frequently |
| A purchases journal is used to journalize: A. all transactions B. all purchase transactions C. all purchase of merchandise on account transactions D. adjusting entries | C. all purchase of merchandise on account transactions |
| The entry to journalize payment to replenish a petty cash fund is: A. debit Cash; credit Petty Cash B. debit the appropriate expense and other accounts; credit Petty Cash C. debit the appropriate expense and other accounts; credit Cash | C. debit the appropriate expense and other accounts; credit Cash |
| The amount added to the cost of merchandise to establish the selling price is: A. cost of merchandise B. cost of goods sold C. cost of goods sold D. markup | D. markup |
| If merchandise is purchased for $1,000.00 on August 1, with terms of sale of 3/10, n/30, the amount due to the vendor on August 9 is: A. $980.00 B. $30.00 C. $970.00 D. $1,000.00 | A. $970.00 |
| Since contra accounts are offsets to their related accounts, contra account normal balances are (a) debits (b) credits (c) opposite the normal balances of their related accounts (d) the same as the normal balances of their related accounts | (C) Opposite the normal balances of their related accounts |
| An agreement between a buyer and a seller about payment for merchandise is the (a) correcting entry (b) purchase invoice (c) terms of sale (d) sales invoice | terms of sale |
| A liability account that summarizes the amounts owed to all vendors is titled (a) Accounts Payable (b) Accounts Receivable (c) Sales (d) Purchases | Accounts Payable |
| Supplies bought for use in a business are recorded in the (a) supplies account (b) cash account (c) purchases account (d) supplies expense account | supplies account |
| What is the definition of perpetual inventory? | an inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise |
| What is the definition of articles of corporation? | A legal document that identifies basic characteristics of a corporation |
| What is meant by general amount column? | A journal amount column that is not headed with an account title |
| What is the definition of corporation? | An organization with the legal rights of a person which many persons or other corporations may own. |
| What is the definition of stockholder? | The owner of one or more shares of stock. |
| What is the definition of a periodic inventory? | A merchandise inventory evaluated at the end of a fiscal period |
Created by:
oliviamock