accounting chapter 9

The subsidiary ledger containing vendor accounts. (p. 246)

Accounts Payable Ledger

The assets or other financial resources available to a business. (p. 244)

Capital

The total shares of ownership in a corporation. (p. 244)

Capital stock

A deduction that a vendor allows on an invoice amount to encourage prompt payment. (p. 260)

Cash Discount

The legal right for a business to conduct operations as a corporation. (p. 244)

Charter

An account that reduces a related account on a financial statement. (p. 263)

Contra Account

An account in a general ledger that summarizes all accounts in a subsidiary ledger. (p. 246)

Controlling Account

An organization with the legal rights of a person which many persons or other corporations may own. (p. 244)

Corporation

The maximum outstanding balance allowed to a customer by a vendor. (p. 267)

Credit Limit

The owner of one or more shares of stock. (p. 244)

Stockholder

A reduction in the list price granted to a merchandising business. (p. 260)

Trade discount

A business from which merchandise, supplies, or other assets are purchased. (p. 246)

Vendor

A legal document that identifies basic characteristics of a corporation. (p. 244)

articles of incorporation

A special journal used to record only cash payment transactions. (p. 260)

cash payments journal

The amount a business pays for goods it purchases to sell. (p. 250)

cost of merchandise

The period of time during which a customer may take a cash discount. (p. 263)

discount period

A journal amount column that is not headed with an account title. (p. 260)

general amount column

A list of assets, usually containing the value of individual items. (p. 249)

inventory

Goods that a business purchases in order to sell. (p. 244)

merchandise

The goods a business has on hand for sale to customers. (p. 249)

merchandise inventory

A merchandise inventory evaluated at the end of a fiscal period. (p. 249)

periodic inventory

A journal amount column headed with an account title. (p. 252)

special amount column

A ledger that is summarized in a single general ledger account. (p. 246)

subsidiary ledger

An agreement between a buyer and a seller about payment for merchandise. (p. 252)

terms of sale

A business that buys and resells merchandise primarily to other merchandising businesses. (p. 244)

wholesale merchandising business

The retail price listed in a catalog or on an Internet site. (p. 260)

List price

A business that purchases and resells goods. (p. 244)

Merchandising business

The price after the trade discount has been deducted from the list price. (p. 260)

Net Price

An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise. (p. 249)

Perpetual inventory

An invoice used as a source document for recording a purchase on account transaction. (p. 252)

Purchase Invoice

A transaction in which the items purchased are to be paid for later. (p. 252)

Purchase on Account

A form requesting the purchase of merchandise. (p. 251)

Requisition

A merchandising business that sells to those who use or consume the goods. (p. 244)

Retail merchandising business

A listing of vendor accounts, account balances, and the total amount due to all vendors. (p. 272)

Schedule of accounts payable

Each unit of ownership in a corporation. (p. 244)

Share of stock

A journal used to record only one kind of transaction. (p. 251)

Special Journal

When a periodic inventory is conducted by counting, weighing, or measuring items of merchandise on hand. (p. 249)

physical inventory

A form requesting that a vendor sell merchandise to a business. (p. 251

purchase order

When a company that has purchased merchandise on account takes a cash discount. (p. 263)

purchases discount

A special journal used to record only purchases of merchandise on account. (p. 252)

purchases journal

The date by which an invoice must be paid. (p. 252)

Due Date