29 terms

Chapter 9

STUDY
PLAY
Merchandise
Goods that a business purchases to sell
Merchandising Business
A business that purchases and sells goods.
Retail Merchandising Business
A merchandising business that sells to those who use or consume goods.
Wholesale merchandising business
A business that buys and resells merchandise to retail merchandising businesses.
Corporation
An organization with the legal rights of a person and which many persons may own.
Share of Stock
Unit of ownership in a corporation.
Capital Stock
Total shares of ownership.
Stockholder
An owner of one or more shares of the corporation.
Special Journal
A journal used to record only one type of transaction.
Cost of Merchandise
The price a business pays for goods it purchases to sell.
Markup
The amount added to the cost of merchandise to establish the selling price.
Vendor
A business from which merchandise is purchased or supplies or other assets are bought.
Purchase on Account
A transaction in which the merchandise purchased is to be paid for later.
Purchases Journal
A special journal used to record only purchases of merchandise on account.
Special Amount Column
A journal amount column headed with an account title.
Purchase Invoice
Source document for a purchase on account.
Terms of Sale
An agreement between a buyer and seller about payment for merchandise. 2/10, n/30
Cash Payments Journal
A special journal used to record only cash payments.
Cash Discounts
A deduction that vendors allows on the invoice amount to encourage prompt payment.
Purchases Discounts
A cash discount on purchases taken by the customer.
General Amount Columns
A journal amount column that is not headed with an account title.
List Price
The retail price listed in a catalog or on an internet site.
Trade Discount
A reduction in the list price granted to customers.
Contra Account
An account that reduces a related account on a financial statement.
Cash Short
A petty cash on hand amount that is less than a recorded amount. (Debit Balance)
Cash Over
A petty cash on hand amount that is more than a recorded amount (Credit Balance)
Purchases Return
Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's accounts payable.
Purchases Allowance
Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer's accounts payable.
Debit Memorandum
A form prepared by the customer showing the price reduction taken by the customer for returns and allowances.