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Home / Questions / Preparing, journalizing, and posting a credit memorandum. 1) If a credit memorandum is i

Preparing, journalizing, and posting a credit memorandum. 1) If a credit memorandum is i

 Preparing, journalizing, and posting a credit memorandum.

 

1) If a credit memorandum is issued, what account will be increased on the seller's books?

A) Accounts Receivable

B) Accounts Payable

C) Sales Discount

D) Sales Returns and Allowances

 

2) If a credit memorandum is issued, what account will be decreased on the seller's books?

A) Accounts Receivable

B) Accounts Payable

C) Sales Discount

D) Sales Returns and Allowances

 

3) 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

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.

 

4) Collected a payment from a credit customer: This will be recorded with

A) a credit to an asset account.

B) a credit to a liability account.

C) a credit to Capital.

D) None of these are correct.

 

5) Received payment, within the discount period, for merchandise sold previously. This will be recorded with

A) a credit to an asset account.

B) a debit to a liability account.

C) a debit to Capital.

D) None of these are correct.

6) A record showing the activity and the balances owed by each customer is called the

A) general ledger.

B) sales journal.

C) cash receipts journal.

D) accounts receivable subsidiary ledger.

 

7) Every controlling account must have its own

A) revenue ledger.

B) general ledger.

C) subsidiary ledger.

D) journal.

 

8) A characteristic of a schedule of accounts receivable is that

A) it contains a list of customers' names with balances.

B) the total is equal to the accounts receivable control account at the end of the month.

C) it is prepared at the end of the month.

D) All of these answers are correct.

 

9) Which of the following statements about subsidiary ledgers is most accurate?

A) The subsidiary ledger accounts will never equal the control account in the general ledger.

B) The accounts receivable subsidiary ledger is a book of accounts that provides supporting detail for Accounts Receivable.

C) The subsidiary ledger accounts will equal the amount in the Sales account.

D) All of these answers are correct.

 

10) Payment for merchandise sold on credit for $50 subject to 2/10 n/30 was received within the discount period ? $49 was received. This was recorded with a debit to Sales Discounts for $1, a debit to Cash for $49, and a credit to Accounts Receivable $50, but no mention was made of the subsidiary ledger account. This error will cause

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.

11) 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

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.

 

12) The accounts receivable subsidiary ledger

A) is organized in alphabetical order.

B) is not kept in the same book as Accounts Receivable.

C) should equal the controlling account in the general ledger.

D) All of the above are correct.

 

13) When a customer pays an account, the transaction would be recorded in the

A) cash receipts journal.

B) purchases journal.

C) sales journal.

D) cash payments journal.

 

14) Gina's Flower Shop received payment in full for goods sold within the discount period on a $1,000 sales invoice, terms 1/10, n/30. Which entry records this transaction?

A) Debit Accounts Receivable, credit Flower Sales for $1,000

B) Debit Cash, credit Accounts Receivable for $990

C) Debit Cash for $990, debit Sales Discount for $10, and credit Accounts Receivable for $1,000

D) Debit Cash for $990, debit Sales Discount for $10, and credit Flower Sales for $1,000

Dec 06 2019 View more View Less

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