Ch. 2 Review Advanced Accounting

Departmental information can help identify problems in specific departments.

• TRUE
• FALSE

In a cash receipts journal, sales and sales returns and allowances are recorded by department.

• TRUE
• FALSE

Frequent postings are made from the customers� accounts to the general journal in order to keep the customers� accounts up to date.

• TRUE
• FALSE

The form prepared by the vendor showing the amount deducted for returns and allowancesis known as a credit memorandum.

• TRUE
• FALSE

Each amount recorded in the Accounts Receivable Credit column of the cash receipts journalis posted to the appropriate customer account in the accounts receivable ledger.

• TRUE
• FALSE

To have complete departmental data, purchases, sales, cash receipts, and cash payments must be analyzed by department.

• TRUE
• FALSE

The sales journal has three credit columns: (1) Sales Discount, (2) Sales, and (3) Sales Tax Payable.

• TRUE
• FALSE

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.

• TRUE
• FALSE

By recording sales returns and allowances separately, a business can easily determine the proportion of merchandise sold that was returned by customers.

• TRUE
• FALSE

The total amount shown on a sales invoice includes the price of the merchandise plus the sales tax.

• TRUE
• FALSE