A Debit Memorandum Is

question 25

Multiple Choice

A debit memorandum is:

• A)Required whenever a journal entry is recorded.
• B)The source document for the purchase of merchandise inventory.
• C)Required when a purchase discount is granted.
• D)The document a buyer issues to inform the seller of a debit made to the seller's account payable in the buyer's records.
• E)Not necessary in a perpetual inventory system.

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Definitions:

Non-interest Bearing

A financial term indicating a debt or deposit that does not accrue interest over time, identical in concept to its prior mention but explained with different wording.

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, compounding the amount on which future interest is calculated.

Compounded Semi-annually

The process of adding interest to the principal sum of a loan or deposit on a twice-yearly basis, resulting in interest on interest.

Payments

Amounts of money paid by one party to another, often at regular intervals, in exchange for goods or services.