Accounting 2 Chapter 2

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

• True

• False

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

• True

• False

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

• 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

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

• True

• False

All departmental sales are recorded in a sales journal.

• True

• False

A sales return results in a credit to the customer's account and the general ledger account, Accounts Receivable.

• True

• False

The terminal summary is the source document for both cash sales and credit card sales.

• 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

In states that have a sales tax, businesses include a Sales Tax Payable Credit column in the sales journal.

• True

• False