Century 21 Accounting, Advanced, 11e Claudia Bienias Gilbertson, Mark Lehman, Daniel Passalacqua
(Test Bank All Chapters, 100% Original Verified, A+ Grade)
Name:
Class:
Date:
Chapter 1 Recording Departmental Purchases and Cash Payments
True / False
1. Individual amounts in the Accounts Payable Credit column of the purchases journal are posted often to the appropriate
vendor accounts.
a. True
b. False
ANSWER: True
2. The accounting concepts used to record and report financial information are determined by the size, type, and
complexity of the business.
a. True
b. False
ANSWER: False
3. The check number is placed in the Post. Ref. column of the cash payments journal during the posting process.
a. True
b. False
ANSWER: False
4. In a departmental accounting system, a notation is placed on each purchase invoice indicating the department to which
the purchase applies.
a. True
b. False
ANSWER: True
5. Most businesses record purchase returns and allowances in the Purchases Returns and Allowances column of the
purchases journal.
a. True
b. False
ANSWER: False
6. The vendor number is placed in the Post. Ref. column of the purchases journal as the last step of the posting process.
a. True
b. False
ANSWER: True
7. To encourage early payment, a seller may offer a cash discount, which allows a deduction from the invoice amount.
a. True
b. False
ANSWER: True
8. The column totals of a special journal are only posted at the end of the month.
a. True
b. False
ANSWER: False
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Chapter 1 Recording Departmental Purchases and Cash Payments
9. In a departmental accounting system, there will be an accounts payable account for each department.
a. True
b. False
ANSWER: False
10. When merchandise is returned, the vendor usually give credit to the buyer.
a. True
b. False
ANSWER: True
11. Amounts from the Accounts Payable Debit column of a cash payments journal are posted to the accounts payable
ledger when the transaction is entered in the journal.
a. True
b. False
ANSWER: True
12. An account showing deductions from a purchases account is a contra purchases account.
a. True
b. False
ANSWER: True
13. The only type of entries recorded in a cash payments journal are cash payments for merchandise purchases.
a. True
b. False
ANSWER: False
14. A purchase discount reduces the amount of cash that must be paid for a purchase.
a. True
b. False
ANSWER: True
15. Purchase invoices are the source documents for purchases on account.
a. True
b. False
ANSWER: True
16. When a cash discount is taken after a purchase return or allowance has been granted, the discount is calculated using
the original amount of the invoice.
a. True
b. False
ANSWER: False
17. All departmental purchases of merchandise on account are recorded in a purchases journal.
a. True
b. False
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Date:
Chapter 1 Recording Departmental Purchases and Cash Payments
ANSWER: True
18. Vendor accounts are maintained in a vendors payable ledger.
a. True
b. False
ANSWER: False
19. To replenish petty cash, a check is written for the amount spent from the fund.
a. True
b. False
ANSWER: True
20. Proving the purchases journal means that all amount columns are totaled and double lines are placed across
the amount columns to indicate that the totaling process is complete.
a. True
b. False
ANSWER: False
21. When posting a merchandise purchase in a purchases journal, enter the vendor's invoice number in the
Purch. No. column.
a. True
b. False
ANSWER: False
22. The totals of the general columns of a cash payments journal should be posted to the general ledger when
the journal is full or at the end of a month.
a. True
b. False
ANSWER: False
Multiple Choice
23. An amount owed by a business is called a(n)
a. asset
b. equity
c. liability
d. credit
ANSWER: c
24. The recording of debit and credit parts of a transaction is called
a. the accounting equation
b. posting
c. double-entry accounting
d. processing
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Chapter 1 Recording Departmental Purchases and Cash Payments
ANSWER: c
25. A group of accounts is called a
a. ledger
b. special journal
c. journal
d. none of these
ANSWER: a
26. Transferring information from a journal entry to a ledger account is called
a. ordering
b. recording
c. posting
d. none of these
ANSWER: c
27. A journal used to record only one kind of transaction is called a
a. ledger
b. special journal
c. source document
d. none of these
ANSWER: b
28. A form prepared by the customer showing a price deduction for purchases returns and allowances is called a
a. debit memorandum
b. credit memorandum
c. controlling account
d. sales invoice
ANSWER: a
29. The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current is
called
a. accounting
b. double-entry accounting
c. controlling accounting
d. none of these
ANSWER: d
30. An equation showing the relationship among assets, liabilities, and owners’ equity is called the
a. accounting equation
b. financial equation
c. journal equation
d. none of these
ANSWER: a
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Chapter 1 Recording Departmental Purchases and Cash Payments
31. A cash discount on purchases taken by a customer is called a
a. cash purchase discount
b. good customer discount
c. credit discount
d. purchases discount
ANSWER: d
32. A ledger that is summarized in a single general ledger account is called a
a. controlling account ledger
b. subsidiary ledger
c. maintenance ledger
d. none of these
ANSWER: b
33. The amount remaining after the value of all liabilities is subtracted from the value of all assets is called
a. owners' balance
b. owners' equity
c. owners' liability
d. none of these
ANSWER: b
34. An account that reduces a related account is called a(n)
a. contra account
b. credit account
c. liability
d. equity account
ANSWER: a
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Chapter 2 Recording Departmental Sales and Cash Receipts
1. Departmental information can help identify problems in specific departments.
a. True
b. False
ANSWER: True
2. In a cash receipts journal, sales and sales returns and allowances are recorded by department.
a. True
b. False
ANSWER: False
3. Frequent postings are made from the customers’ accounts to the general journal in order to keep the
customers’ accounts up to date.
a. True
b. False
ANSWER: False
4. The form prepared by the vendor showing the amount deducted for returns and allowances is known as a
credit memorandum.
a. True
b. False
ANSWER: True
5. Each amount recorded in the Accounts Receivable Credit column of the cash receipts journal is posted to the
appropriate customer account in the accounts receivable ledger.
a. True
b. False
ANSWER: True
6. To have complete departmental data, purchases, sales, cash receipts, and cash payments must be analyzed by
department.
a. True
b. False
ANSWER: True
7. The sales journal has three credit columns: (1) Sales Discount, (2) Sales, and (3) Sales Tax Payable.
a. True
b. False
ANSWER: False
8. When amounts are posted from the sales journal to the customers’ accounts, the customer number is recorded
in the Post. Ref. column of the sales journal.
a. True
b. False
ANSWER: True
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Chapter 2 Recording Departmental Sales and Cash Receipts
9. In states that have a sales tax, businesses include a Sales Tax Payable Credit column in the sales journal.
a. True
b. False
ANSWER: True
10. The Realization of Revenue accounting concept explains why businesses record departmental sales at the
time of sale, regardless of when payment is made.
a. True
b. False
ANSWER: True
11. By recording sales returns and allowances separately, a business can easily determine the proportion of
merchandise sold that was returned by customers.
a. True
b. False
ANSWER: True
12. The total amount shown on a sales invoice includes the price of the merchandise plus the sales tax.
a. True
b. False
ANSWER: True
13. The terminal summary is the source document for both cash sales and credit card sales.
a. True
b. False
ANSWER: True
14. All departmental sales are recorded in a sales journal.
a. True
b. False
ANSWER: False
15. A sales return results in a credit to the customer’s account and the general ledger account, Accounts
Receivable.
a. True
b. False
ANSWER: True
16. The terms n/30 require the customer to pay the full amount of the invoice within 30 days of the invoice date.
a. True
b. False
ANSWER: True
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17. The
column
totals of the sales
journal are postedby
to theemail
general ledger
when the journal is filled.
a. True
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Chapter 2 Recording Departmental Sales and Cash Receipts
b. False
ANSWER: False
18. Posting a sales return from the general journal results in a credit being posted to the Accounts Receivable account and
the customer's account.
a. True
b. False
ANSWER: True
19. The amount of cash received when a $100.00 sale, plus sales tax of 5%, is collected within the 2/10, n/30 discount
period is $98.00.
a. True
b. False
ANSWER: False
20. The cash receipts journal should be proved before posting the column totals to the general ledger.
a. True
b. False
ANSWER: True
Jenson Boats has two departments: Boats and Accessories. The sales tax rate is 5%. All sales are made on terms of 2/10,
n/30.
Sold a boat on account to Robson Randle, $9,000.00 plus sales tax, $450.00; total $9,450.00; Sales Invoice No. 777.
(Questions 21-24)
Received cash on account from Robson Randle, covering Sales Invoice No. 777, less 2% discount. (Questions 25-30)
21. Read the information for Jenson Boats. The transaction would be recorded in the
a. sales journal
b. general journal
c. cash receipts journal
d. none of these
ANSWER: a
22. Read the information for Jenson Boats. The general ledger account(s) debited for this transaction is (are)
a. Accounts Receivable
b. Sales—Boats and Sales Tax Payable
c. Accounts Receivable and Sales—Boats
d. Accounts Receivable and Cash
ANSWER: a
23. Read the information for Jenson Boats. The account(s) credited for this transaction is (are)
a. Accounts Receivable
b. Accounts Receivable and Sales—Boats
Sales—Boats and Sales Tax Payable
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Accounts Receivable and Cash
c.
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Chapter 2 Recording Departmental Sales and Cash Receipts
ANSWER: c
24. Read the information for Jenson Boats. The title recorded in the Account Debited column is
a. Accounts Receivable
b. Sales—Boats
c. Jenson Boats
d. Robson Randle
ANSWER: d
25. Read the information for Jenson Boats. This transaction is recorded in the
a. sales journal
b. general journal
c. cash receipts journal
d. none of these
ANSWER: c
26. Read the information for Jenson Boats. The general ledger account(s) debited for this transaction is (are)
a. Accounts Receivable and Sales Tax Payable
b. Accounts Receivable
c. Cash and Sales Discount—Boats
d. Accounts Receivable and Cash
ANSWER: c
27. Read the information for Jenson Boats. The general ledger account(s) credited for this transaction is (are)
a. Accounts Receivable and Sales Tax Payable
b. Accounts Receivable
c. Cash and Sales Discount—Boats
d. Accounts Receivable and Cash
ANSWER: b
28. Read the information for Jenson Boats. The amount of cash received for this transaction is
a. $9,450.00
b. $9,261.00
c. $9,270.00
d. $8,820.00
ANSWER: b
29. When journalizing a sales return transaction in the general journal, the accounts debited are
a. Accounts Receivable and Sales Tax Payable
b. Sales Tax Payable and Sales
c. Sales Tax Payable and Sales Returns and Allowances
d. Sales Returns and Allowances and Cash
ANSWER: c
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