Accounting Chapter 9

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

purchases discount

a cash discount on purchases taken by a customer

cash discount

a deduction that a vendor allows on the invoice amount to encourage prompt payment

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

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 customers

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

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 many persons may own

stockholder

an owner of one or more shares of a corporation

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

capital stock

total shares of ownership in 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 payable

share of stock

each unit of ownership in a corporation

merchandise

goods that a business purchases to sell