Accounting II final exam review

A business usually knows at the end of the fiscal year which customer accounts will become uncollectible.

• True

• False

The terms of sale 1/10, n/30 means that 1/10 or 10% of the invoice amount may be deducted if paid within 30 days.

• True

• False

When using the allowance method, writing off an uncollectible account does not change the net realizable value of accounts receivable.

• True

• False

The direct write-off method complies with generally accepted accounting principles.

• True

• False

A corporation can decide if and when to declare a dividend.

• True

• False

A sales return that credits the customer’s account is recorded in the general journal.

• True

• False

Regardless of when payment is received, the revenue should be recorded when a sale is made, not on the date cash is received.

• True

• False

Transactions that cannot be recorded in a special journal are recorded in a general journal.

• True

• False

Only the federal government can exempt from sales taxes some types of merchandise or sales to certain types of customers.

• True

• False

An entry in the general journal that affects Accounts Payable also affects a vendor’s account in the accounts payable ledger.

• True

• False