Accounting (chapter 9)

contra account

An account that reduces a related account on a financial statement.

terms of sale

An agreement between a buyer and a seller about payment for merchandise.

purchase invoice

An invoice used as a source document for recording a purchase on account transaction.

corporation

An organization with the legal rights of a person and which may be owned by many persons.

stockholder

An owner of one or more shares of a corporation.

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.

purchases return

Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer's accounts payble.

share of stock

Each unit of ownership in a corporation.

merchandise

Goods that a merchandising business purchases to sell

capital stock

Total shares of ownership in a corporation.

cash discount

a deduction from the invoice amount, allowed by a vendor to encourage early payments.

retail merchandising business

A merchandising business that sells to those who use or consume the goods.

cash short

A petty cash on hand amount that is less than a recorded amount.

cash over

A petty cash on hand amount that is more than a recorded amount

trade discount

A reduction in the list price granted to a customer.

cash payments journal

A special journal used to record only cash payment transactions.

purchases journal

A special journal used to record only purchases of merchandise on account.

purchase on account

A transaction in which the merchandise purchased is to be paid for later.

vendor

A business from which merchandise is purchased or supplies or other assets are bought.

wholesale merchandising business

A business that buys and resells merchandise to retail merchandising business

merchandising business

A business that purchases an sells goods

purchases discount

A cash discount on purchases taken by a customer.

debit memorandum

A form prepared by the customer showing the price deduction taken by the customer for returns and allowances.

special amount column

A journal amount column headed with an account title.

general amount column

A journal amount column that is not headed with an account title

special journal

A journal used to record only one kind of transaction.

markup

The amount added to the cost of merchandise to establish the selling price.

cost of merchandise

The price a business pays for goods it purchases to sell.

list price

The retail price listed in a catalog or on an Internet site.