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Chapter 9
| Term | Definition |
|---|---|
| Merchandise | Goods that a business purchases to sell |
| Merchandising business | A business that purchases and resells goods |
| Retail Merchandising business | A merchandising business that sells to those who use or consume the goods |
| Wholesale Merchandising business | buys and resells merchandise primarily to other merchandising businesses. Some sell to individuals |
| Corporation | an organization with the legal rights of a person which many persons or other corporations may own |
| Capital | The assets or other financial resources available to a business |
| Share of Stock | Each unit of ownership in a corporation |
| Stockholder | The owner of one or more shares of stock is called a stockholder |
| Capital Stock | The total shares of ownership in a corporation |
| Articles of Incorporation | A legal document that identifies basic characteristics of a corporation, is a part of the application submitted to a state to become a corporation |
| Charter | The legal right for a business to conduct operation as a corporation |
| Vendor | A business from which merchandise, supplies or other assets are purchased |
| Subsidiary Ledger | A ledger that is summarized in a single general ledger account |
| Accounts Payable Ledger | The subsidiary ledger containing vendor accounts |
| Controlling Account | An account in a general ledger that summarizes all accounts in a subsidiary ledger |
| Inventory | A list of assets, usually containing the value of individual items |
| Merchandise Inventory | The goods a business has on hand for sale to customers |
| Perpetual Inventory | An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise |
| Periodic inventory | A merchandise inventory evaluated at the end of a fiscal period |
| Physical inventory | When a periodic inventory is conducted by counting, weighing, or measuring items of merchandise on hand |
| Cost of Merchandise | The amount a business pays for goods it purchases to sell |
| Requisition | A form requesting the purchase of merchandise |
| Purchase Order | A form requesting that a vendor sell merchandise to a business |
| Special Journal | A journal used to record only one kind of transaction |
| Purchase on Account | A transaction in which the items purchased are 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 | An invoice used as a source document for recording a purchase on account transaction |
| Terms of Sale | An agreement between a buyer and a seller about payment for merchandise |
| Due Date | A date by which an invoice must be paid |
| Cash Payments Journal | A special journal used to record only cash payment transactions |
| List Price | The retail price listed in a catalog or on an internet site |
| Trade Discount | a reduction in the list price granted to a merchandising business |
| Net Price | The price after the trade discount has been deducted from the list price. |
| Cash Discount | A deduction that the vendor allows on an invoice amount to encourage prompt payment |
| General Amount Column | A journal amount column that is not headed with an account title |
| Discount Period | The period of time during which a customer may take a cash discount |
| Purchases Discount | When a company that has purchased merchandise on account takes a cash discount |
| Contra Account | An account that reduces a related account on a financial statement |
| Credit Limit | The maximum outstanding balance allowed to a customer by a vendor |
| Schedule of Accounts Payable | A listing of vendor accounts, account balances, and the total amount due to all vendors |
Created by:
andrew.v
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