Unit 9

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 goods

Answer 3

retail merchandising business

Question 4

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

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

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 form 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

purchase 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 seller about payment for merchandise

Answer 29

terms of sale

Question 30

The date by which an invoice must be payed

Answer 30

due date

Question 31

A special journal used to record only cash payment transaction

Answer 31

cash payments journal

Question 32

The retail price listed in 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 take 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