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Goods that a business purchases in order to sell. (p. 244)
merchandise
A business that purchases and resells goods. (p. 244)
Merchandising business
A merchandising business that sells to those who use or consume the goods. (p. 244)
Retail merchandising business
A business that buys and resells merchandise primarily to other merchandising businesses. (p. 244)
wholesale merchandising business
An organization with the legal rights of a person which many persons or other corporations may own. (p. 244)
Corporation
The assets or other financial resources available to a business. (p. 244)
Capital
Each unit of ownership in a corporation. (p. 244)
Share of stock
The owner of one or more shares of stock. (p. 244)
Stockholder
The total shares of ownership in a corporation. (p. 244)
Capital stock
A legal document that identifies basic characteristics of a corporation. (p. 244)
articles of incorporation
The legal right for a business to conduct operations as a corporation. (p. 244)
Charter
A business from which merchandise, supplies, or other assets are purchased. (p. 246)
Vendor
A ledger that is summarized in a single general ledger account. (p. 246)
subsidiary ledger
The subsidiary ledger containing vendor accounts. (p. 246)
Accounts Payable Ledger
An account in a general ledger that summarizes all accounts in a subsidiary ledger. (p. 246)
Controlling Account
A list of assets, usually containing the value of individual items. (p. 249)
inventory
The goods a business has on hand for sale to customers. (p. 249)
merchandise inventory
An inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise. (p. 249)
Perpetual inventory
A merchandise inventory evaluated at the end of a fiscal period. (p. 249)
periodic inventory
When a periodic inventory is conducted by counting, weighing, or measuring items of merchandise on hand. (p. 249)
physical inventory
The amount a business pays for goods it purchases to sell. (p. 250)
cost of merchandise
A form requesting the purchase of merchandise. (p. 251)
Requisition
A form requesting that a vendor sell merchandise to a business. (p. 251
purchase order
A journal used to record only one kind of transaction. (p. 251)
Special Journal
A transaction in which the items purchased are to be paid for later. (p. 252)
Purchase on Account
A special journal used to record only purchases of merchandise on account. (p. 252)
purchases journal
A journal amount column headed with an account title. (p. 252)
special amount column
An invoice used as a source document for recording a purchase on account transaction. (p. 252)
Purchase Invoice
An agreement between a buyer and a seller about payment for merchandise. (p. 252)
terms of sale
The date by which an invoice must be paid. (p. 252)
Due Date
A special journal used to record only cash payment transactions. (p. 260)
cash payments journal
The retail price listed in a catalog or on an Internet site. (p. 260)
List price
A reduction in the list price granted to a merchandising business. (p. 260)
Trade discount
The price after the trade discount has been deducted from the list price. (p. 260)
Net Price
A deduction that a vendor allows on an invoice amount to encourage prompt payment. (p. 260)
Cash Discount
A journal amount column that is not headed with an account title. (p. 260)
general amount column
The period of time during which a customer may take a cash discount. (p. 263)
discount period
When a company that has purchased merchandise on account takes a cash discount. (p. 263)
purchases discount
An account that reduces a related account on a financial statement. (p. 263)
Contra Account
The maximum outstanding balance allowed to a customer by a vendor. (p. 267)
Credit Limit
A listing of vendor accounts, account balances, and the total amount due to all vendors. (p. 272)
Schedule of accounts payable
