Accounting for a Merchandising Business

Terms of Sale

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

Purchases 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 many persons may own.

Stockholder

An owner of one or more shares of a corporation

Share of Stock

Each unit of ownership in a corporation

Merchandise

Goods that a business purchases to sell.

Capital Stock

Total shares of ownership in a corporation

Retail Merchandising Business

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

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 businesses.

Merchandising Business

A business that purchases and sells goods.

Special Journal

A journal used to record only one kind of transaction.

Cost of Merchandise

The actual cost to the business of the merchandise sold to customers.

Markup

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