Accounting Chapter 9

Front

A corporation can own property, incur liabilities, and enter into contracts in its own name.

Back

True

Front

A special journal used to record only purchases of merchandise on account is called a purchases journal.

Back

True

Front

A cash payments journal includes a special amount column for the cash account and the accounts payable account.

Back

True

Front

The source document for most cash payments is the check issued.

Back

True

Front

A special journal entry is made to show the amount of a trade discount.

Back

False

Front

A reduction in the list price granted to customers is called a trade discount.

Back

True

Front

The terms of sale 2/15, n/30 mean that 2% of the invoice amount may be deducted if paid within 15 days of the invoice date or the total invoice amount must be paid within 30 days.

Back

True

Front

The contra account Purchases Discount has a normal debit balance.

Back

False

Front

A journal is proved and ruled only at the end of a fiscal period.

Back

False

Front

Do all vendors offer purchase discounts?

Back

False