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Accounting ll
Ch. 18 vocab.
Question | Answer |
---|---|
An organization with legal rights of a person and which may be owned by many persons. | Corporation |
Each unit of ownership in a corporation. | Share of stock |
Total shares of ownership in a corporation. | Capital stock |
Financial information is recorded and reported separately from the owner's personal financial information. | Business entity |
For all purchases of merchandise on account. | Purchase journal |
For all cash payments. | Cash payments journal |
For all sales of merchandise on account. | Sales journal |
For all cash receipts. | Cash receipts journal |
A liability account that summarizes the amounts owed to all vendors. | Accounts payable |
A business's printed or catalog price. | List price |
A reduction in the list price granted to customers. | Trade discount |
The actual amount paid for merchandise or other items bought is recorded. | Historical cost |
A deduction from the invoice amount, allowed by a vendor to encourage early payment. | Cash discount |
A cash discount on purchases taken by a customer. | Purchases discount |
An account that reduces a related account on a financial statement. | Contra account |
2% of the invoice amount may be deducted if the invoice is paid within 10 days of the invoice date. The total invoice amount must be paid within 30 days. | 2/10, n/30 |
An amount of cash kept on hand and used for making small payments. | Petty cash fund |
A petty cash on hand amount that is less than a recorded amount. | Cash short |
A petty cash on hand amount that is more than the recorded amount. | Cash over |
Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's accounts payable. | Purchases return |
Credit allowed for part of the purchases price of merchandise that is not returned, resulting in a decrease in the customer's accounts payable. | Purchases allowance |
A form prepared by the customer showing the price deduction taken by the customer for returns and allowances. | Debit memorandum |
A source document is prepared for each transaction. | Objective evidence |