Chapter 9
vendor
A business from which merchandise is purchased or supplies or other assets are bought is called a vendor.
wholesale merchandising business
A business that buys and resells merchandise to retail merchandising businesses is called a wholesale merchandising business.
debit memorandum
A form prepared by the customer showing the price deduction taken by the customer for returns and allowances is called a debit memorandum.
retail merchandising business
A merchan- dising business that sells to those who use or consume the goods is called a retail merchandising business.
cash short
A petty cash on hand amount that is less than a recorded amount is called cash short
cash payments journal
A special journal used to record only cash payment trans- actions is called a cash payments journal.
purchases journal
A special journal used to record only purchases of mer- chandise on account is called a purchases journal.
purchase invoice
An invoice used as a source docu- ment for recording a purchase on account transaction is called a purchase invoice.
corporation
An organization with the legal rights of a person and which many persons may own is called a corporation.
stockholder
An owner of one or more shares of a corporation is called a stockholder.
general amount column
A journal amount column that is not headed with an account title is called a general amount column.
special journal
A journal used to record only one kind of transaction is called a special journal.
cash over
A petty cash on hand amount that is more than a recorded amount is called cash over.
purchases return
Credit allowed for the purchase price of returned merchandise, resulting in a decrease in the cus- tomer's accounts payable, is called a purchases return.
Merchandising business
A business that purchases and sells goods is called a merchandising business.
purchases discount
A cash discount on purchases taken by a customer is called a purchases discount.
cash discount
A deduction that a vendor allows on the invoice amount to encour- age prompt payment is called a cash discount.
special amount column
A journal amount column headed with an account title is called a special amount column
trade discount
A reduction in the list price granted to customers is called a trade discount.
purchase on account
A transaction in which the merchandise purchased is to be paid for later is called a purchase on account.
contra account
An account that reduces a related account on a financial statement is called a contra account.
terms of sale
An agreement between a buyer and a seller about payment for merchandise is called the terms of sale.
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, is called a purchases allowance.
share of stock
Each unit of ownership in a corporation is called a share of stock.
Merchandise
Goods that a business pur- chases to sell are called merchandise.
markup
The amount added to the cost of merchandise to establish the selling price is called markup
cost of merchandise
The price a business pays for goods it purchases to sell is called cost of merchandise.
capital stock
Total shares of ownership in a corporation are called capital stock.
list price
The retail price listed in a catalog or on an Internet site is called a list price.