Chapter 9 class

Question 1

total shares of ownership in a corporation

Answer 1

capital stock

Question 2

a deduction that a vendor allows on the invoice amount to encourage prompt payment; stated as a percentage deducted from invoice amount

Answer 2

cash discount

Question 3

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

Answer 3

cash over

Question 4

a special journal used to record only cash payment transactions

Answer 4

cash payments journal

Question 5

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

Answer 5

cash short

Question 6

an account that reduces a related account on a financial statement

Answer 6

contra account

Question 7

an organization with the legal rights of a person and which many persons may own

Answer 7

corporation

Question 8

the price a business pays for goods it purchases to sell

Answer 8

cost of merchandise

Question 9

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

Answer 9

debit memorandum

Question 10

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

Answer 10

general amount column

Question 11

the retail price listed in a catalog or on an Internet site

Answer 11

list price

Question 12

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

Answer 12

markup

Question 13

goods that a business purchases to sell

Answer 13

merchandise

Question 14

a business that purchases and sells goods

Answer 14

merchandising business

Question 15

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

Answer 15

purchase on account

Question 16

credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer’s accounts payable

Answer 16

purchases return

Question 17

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

Answer 17

retail merchandising business

Question 18

each unit of ownership in a corporation

Answer 18

share of stock

Question 19

a journal amount column headed with an account title

Answer 19

special amount column

Question 20

a journal used to record only one kind of transaction

Answer 20

special journal

Question 21

an owner of one or more shares of a corporation

Answer 21

stockholder

Question 22

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

Answer 22

terms of sale

Question 23

Expectation a business will remain in operation indefinitely

Answer 23

Accounting concept of Going Concern

Question 24

Actual amount paid for merchandise or other items bought is recorded

Answer 24

Accounting concept of Historical Cost

Question 25

Source document is prepared for recording purchase on account transaction

Answer 25

Accounting concept of Objective Evidence

Question 26

discount taken on purchases by customer. customer pays less than the invoice amount

Answer 26

purchase discount

Question 27

reduction in list price granted to customers; used to quote different quantities purchased without changing list price

Answer 27

trade discount