Accounting Ch. 2 Review

Records of departmental operating expenses are necessary to determine departmental gross profit from operations.

• True

• False

In a departmental business, each sales invoice shows the amount of merchandise sold by department.

• True

• False

Preparing 2 copies of a sales invoice provides a copy for the customer and a copy for the business to use for journalizing the transaction.

• True

• False

Each departmental sales journal entry is posted individually as a credit to the appropriate customer's account.

• True

• False

After posting a line of departmental sales journal, the customer number is recorded in the journal's posting reference column.

• True

• False

The vendor prepares a debit memo for a sales returns and allowances transaction.

• True

• False

An account showing deductions from a sales account is known as a contra cost account.

• True

• False

A cash discount on a sale taken by the customer is called a sales discount.

• True

• False

A departmental cash receipts journal contains a Cash Debit column for each department.

• True

• False

Both the debit part and the credit parts of a cash or credit card sales transactions are entered in special amount columns in a departmental cash receipts journal.

• True

• False