Chapter 11 Test

Use the following to answer the first 11 questions. You may put a check in the box of the term you have used,

• A. board of directors
• B. credit memorandum
• C. debit memorandum
• D. declaring a dividend
• E. dividends

Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer’s account payable to the vendor.

A form prepared by the vendor showing the amount deducted for returns and allowances.

A group of persons elected by the stockholders to govern a corporation.

Action by a board of directors to distribute corporate earnings to stockholders.

A journal with two amount columns in which all kinds of entries can be recorded.

Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer’s account payable to the vendor.

Credit allowed to a customer for the sales price of returned merchandise, resulting in a decrease in the accounts receivable of the merchandising business.

A form prepared by the customer showing the price deduction taken by the customer for a return or an allowance.

Earnings distributed to stockholders.