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Chapter 9
study guide
| Term | Definition |
|---|---|
| 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 the goods |
| corporation | An organization with the legal rights of a person and which many persons may own |
| share of stock | Each unit of ownership in a corporation |
| capital stock | Total shares of ownership in a corporation |
| stockholder | An owner of one or more shares of a corporation |
| special journal | A journal used to record only one kind 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 | 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 |
| cash payments journal | A special journal used to record only cash payment transactions |
| cash discount | A deduction that a vendor allows on the invoice amount to encourage prompt payment |
| purchases discount | A cash discount on purchases taken by a customer |
| general amount column | 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 |
| cash over | A petty cash on hand amount that is more than a recorded amount |
| 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 prepaid by the customer for returns and allowances |
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