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Chapter-9 - Lecture notes 2

Bachelor of Science in Accountancy (Polytechnic University of the Philippines)

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20. The controlling account in the general ledger for the accounts payable subsidiary ledger is called
accounts payable.

21. The balance in the Accounts Payable controlling account should be equal to the sum of the
accounts payable ledger accounts at the end of the month.

22. The total of the other accounts column is never posted.

23. The (V) in the reference column indicates that the accounts payable subsidiary ledger has been
updated.

24. A debit memorandum that is issued means the buyer owes less money, as merchandise is being
returned or an allowance received.

25. A debit memorandum issued or a credit memorandum received results in a debit to Accounts
Payable and a credit to Purchases, Returns, and Allowances. amount.

26. List price – net price = trade discount amount.

27. The accounts payable ledger is listed in alphabetical order.

28. Purchases, Returns, and Allowances is increased by a credit.

29. The cash payments journal records transactions that involve outward flows of cash.

30. The cash payments journal alleviates certain repetitive posting.

31. Purchases Discounts is increased by credit.

32. A purchase requisition provides the purchasing department the information to then prepare a
purchase order.

33. A receiving report is made out after a company inspects received shipments.

34. The total of the cash column is posted at the end of the month to the general ledger.

F 1. Transactions involving the payment of cash for any purpose are usually recorded in a cash
journal.

T 2. Special journals are modified in practice to adapt to the specific needs of an entity.

T 3. The primary ledger that contains all of the balance sheet and income statement accounts is
called the general ledger.

T 4. At the end of each month, the total of the amount column of the sales journal is posted as a debit
to accounts receivable and a credit to sales.

T 5. After postings have been completed for the month, if the sum of the balances in the accounts
receivable subsidiary ledger does not agree with the balance of the accounts receivable account in
the general ledger, the errors must be located and corrected.

F 6. Sales on account of office equipment used in the business would be recorded in the sales
journal.

T 7. Each amount in the other accounts column of the cash receipts journal must be posted
individually to the appropriate general ledger account.

F 8. When there are numerous accounts with a common characteristic, it is common to place them in
a separate ledger called a detail ledger.

F 9. The sale of merchandise for cash is recorded in the sales journal.

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T 10. The total of the other accounts column of the cash receipts journal is not posted to the general
ledger.

F 11. When special journals, control accounts and subsidiary ledgers are used, no posting to any
ledger is performed until the end of the month.

T 12. For each transaction recorded in the purchases journal, the credit is entered in the accounts
payable column.

T 13. Acquisitions on account which are not provided for in special debit columns are recorded in the
other accounts column in the purchases journal.

T 14. Debits to creditors' accounts for invoices paid are recorded in the accounts payable debit
column of the cash payments journal.

T 15. Comparing the purchase order with the receiving report will show that all the goods ordered
actually arrived and that all goods that arrived were actually ordered.

F 16. The total of the accounts payable column in the cash payments journal is posted at the end of
the month as a debit to accounts payable and a credit to cash.

T 17. When customers are allowed to return merchandise for credit to their accounts, these
transactions are recorded in the general journal.

F 18. A check register is used to record all expenditures.

F 19. The voucher register is a substitute for a sales journal.

F 20. The voucher register takes the place of the cash payments journal.

1. Journals designed in a tabular fashion to accommodate the recording of specific types of similar
transactions. SPECIAL JOURNALS

2. A journal containing transactions that cannot be appropriately recorded in a special journal.

GENERAL JOURNAL

3. The principal ledger containing all of the balance sheet and income statement accounts. GENERAL
LEDGER

4. A group of accounts containing customer names. ACCOUNTS RECEIVABLE LEDGER

5. A general ledger account which is supported by information in a subsidiary ledger. CONTROLLING

ACCOUNT

6. A supplementary record used to provide detailed information for a control account in the general
ledger. SUBSIDIARY LEDGER

7. A special journal used exclusively for recording sales of merchandise on account. SALES
JOURNAL

8. A special journal used to record cash receipts. CASH RECEIPTS JOURNAL

9. A special journal used for recording all items purchased on account. PURCHASES JOURNAL

10. A special journal used for recording all cash payments. CASH PAYMENT JOURNAL

1. Sale of merchandise for cash. CASH RECEIPTS

2. Sale of merchandise on account. SALES

3. Cash refund to a customer. CASH PAYMENTS

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4. Receipt of cash from a customer in settlement of an account. CASH RECEIPTS

5. Purchase of merchandise for cash. CASH PAYMENTS

6. Purchase of merchandise on account. PURCHASES

7. Payment of salaries. CASH PAYMENTS

8. Note payable sent to a creditor in settlement of an account. GENERAL

9. Payment of interest on a mortgage. CASH PAYMENTS

10. Receipt of a note in settlement of a customer's account. GENERAL

1. The type of transaction that would appear in the sales journal would be a sale of d. merchandise on
account. C.

2. The receipt of cash arising from a sales transaction would be recorded in the b. cash receipts
journal.

3. The classification and normal balance of the sales discount account would be contra revenue and
debit.

4. An item retailing for P10,000, subject to a trade discount of 25%, is paid for within the discount
period on terms of 2/10, n/30. What is the amount of payment? P7,350

List price 10,000

Less: trade discount (2,500) 10,000 x 25%
Balance 7,500
Less: purchase discount (150) 7,500 x 2%
Invoice price 7,350

5. Each time an entry is recorded in the purchases journal, the credit would be entered in the a.
accounts payable column

6. Which of the following items would be recorded in the purchases journal?

a. equipment purchased on account b. merchandise purchased on account C. supplies purchased on

account d. all of the above

7. The controlling account in the general ledger that summarizes the debits and credits to the
individual accounts in the customers' ledger is called a. accounts payable. b. accounts receivable.

8. Infrequent sales returns would be recorded in which journal? general

9. The individual amounts in the accounts payable column of the purchases journal are posted to the
appropriate account in the a. accounts payable ledger.

10. The controlling account in the general ledger that summarizes the individual accounts with
creditors in a subsidiary ledger is called a. accounts payable.

11. If a firm uses special journals, in which journal would the sale of merchandise for, cash be
recorded? cash receipts journal

12. A firm that uses special journals acquired merchandise for P5,000, giving a P5,000 note payable.
In which journal would the transaction be recorded? general journal

13. A special journal contained columns for cash, purchases discounts, and accounts payable. This
journal is a cash disbursements journal.

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14. Which of the following is true of a voucher system? a. All major expenditures, including cash
transactions for payment of rent and utilities expense, would first be credited to vouchers payable
before payment is made.

15. When merchandise is returned or a price adjustment is granted, an entry is made in the general
journal.

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 lOMoARcPSD|19848350

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 lOMoARcPSD|19848350

Downloaded by Hannah Labasa (hannahlabasa2003@gmail.com)

 lOMoARcPSD|19848350

Downloaded by Hannah Labasa (hannahlabasa2003@gmail.com)

 lOMoARcPSD|19848350

Downloaded by Hannah Labasa (hannahlabasa2003@gmail.com)

 lOMoARcPSD|19848350

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