Chapter 9 Vocab

Question 1

Goods that a business purchases in order to sell.

Answer 1

merchandise

Question 2

A business that purchases and resells goods.

Answer 2

merchandising business

Question 3

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

Answer 3

retail merchandising business

Question 4

A business that buys and resells merchandise primarily to other merchandising businesses.

Answer 4

wholesale merchandising business

Question 5

An organization with the legal rights of a person which many persons or other corporations may own.

Answer 5

corporation

Question 6

The assets or other financial resources available to a business.

Answer 6

capital

Question 7

Each unit of ownership in a corporation.

Answer 7

share of stock

Question 8

The owner of one or more shares of stock.

Answer 8

stockholder

Question 9

The total shares of ownership in a corporation.

Answer 9

capital stock

Question 10

A legal document that identifies basic characteristics of a corporation.

Answer 10

articles of incorporation

Question 11

The legal right for a business to conduct operations as a corporation.

Answer 11

charter

Question 12

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

Answer 12

vendor

Question 13

A ledger that is summarized in a single general ledger account.

Answer 13

subsidiary ledger

Question 14

The subsidiary ledger containing vendor accounts.

Answer 14

accounts payable ledger

Question 15

An account in a general ledger that summarizes all accounts in a subsidiary ledger.

Answer 15

controlling account

Question 16

A list of assets, usually containing the value of individual items.

Answer 16

inventory

Question 17

The goods a business has on hand for sale to customers.

Answer 17

merchandise inventory

Question 18

An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise.

Answer 18

perpetual inventory

Question 19

A merchandise inventory evaluated at the end of a fiscal period.

Answer 19

periodic inventory

Question 20

When a periodic inventory is conducted by counting, weighing, or measuring items of merchandise on hand.

Answer 20

physical inventory

Question 21

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

Answer 21

cost of merchandise

Question 22

A form requesting the purchase of merchandise.

Answer 22

requisition

Question 23

A form requesting that a vendor sell merchandise to a business.

Answer 23

purchase order

Question 24

A journal used to record only one kind of transaction.

Answer 24

special journal

Question 25

A transaction in which the items purchased are to be paid for later.

Answer 25

purchase on account

Question 26

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

Answer 26

purchases journal

Question 27

A journal amount column headed with an account title.

Answer 27

special amount column

Question 28

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

Answer 28

purchase invoice

Question 29

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

Answer 29

terms of sale

Question 30

The date by which an invoice must be paid.

Answer 30

due date

Question 31

A special journal used to record only cash payment transactions.

Answer 31

cash payments journal

Question 32

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

Answer 32

list price

Question 33

A reduction in the list price granted to a merchandising business.

Answer 33

trade discount

Question 34

The price after the trade discount has been deducted from the list price.

Answer 34

net price

Question 35

A deduction that a vendor allows on an invoice amount to encourage prompt payment.

Answer 35

cash discount

Question 36

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

Answer 36

general amount column

Question 37

The period of time during which a customer may take a cash discount.

Answer 37

discount period

Question 38

When a company that has purchased merchandise on account takes a cash discount.

Answer 38

purchases discount

Question 39

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

Answer 39

contra account

Question 40

The maximum outstanding balance allowed to a customer by a vendor.

Answer 40

credit limit

Question 41

A listing of vendor accounts, account balances, and the total amount due to all vendors.

Answer 41

schedule of accounts payable