Advanced Accounting - Mid-Term Review (Chs 1-4)

A form prepared by the customer showing a price reduction for purchases returns and allowances is called a

• debit memorandum

• credit memorandum

• controlling account

• none of these

When recording a purchase in the purchases journal, what is written in the Account Credited column?

• a check mark

• purchases

• the vendor's name

• the customer's name

Total earnings less total deductions equals

• benefit pay

• overtime earnings

• net pay

• withholding allowance

In most states, unemployment taxes are paid by the employer and the employee.

• True

• False

The series of accounting activities included in recording financial information for a fiscal period is known as the accounting cycle.

• True

• False

In a departmental accounting system, which of the following is NOT analyzed by department?

• sales

• purchases

• payroll taxes expense

• accounts receivable

Financial information that a business records is summarized in

• the post-closing trial balance

• the general ledger

• financial statements

• a work sheet

The credit entry recording a sales return and allowance would be posted to the accounts receivable and general ledgers.

• True

• False

Journal entries that update general ledger accounts at the end of the fiscal period are

adjusting entries.

• True

• False

In a departmental accounting system, each department calculates

• gross profit

• retained earnings

• assets

• net income