Accounting Chapter 9 Vocab

Question 1

Accounts Payable Ledger

Answer 1

the subsidiary ledger containing vendor accounts

Question 2

Articles of Incorporation

Answer 2

a legal document that identifies basic characteristics of a corporation

Question 3

Capital

Answer 3

the assets or other financial resources available to a business

Question 4

Capital Stock

Answer 4

the total shares of ownership in a corporation

Question 5

Charter

Answer 5

the legal right for a business to conduct operations as a corporation

Question 6

Controlling Account

Answer 6

an account in a general ledger that summarizes all accounts in a subsidiary ledger

Question 7

Corporation

Answer 7

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

Question 8

Merchandise

Answer 8

goods that a business purchases in order to sell

Question 9

Merchandising Business

Answer 9

a business that purchases and resells goods

Question 10

Retail Merchandising Business

Answer 10

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

Question 11

Share of Stock

Answer 11

each unit of ownership in a corporation

Question 12

Stockholder

Answer 12

the owner of one or more shares of stock

Question 13

Subsidiary Ledger

Answer 13

a ledger that is summarized in a single general ledger account

Question 14

Vendor

Answer 14

a business from which merchandise, supplies, or other assets are purchased

Question 15

Wholesale Merchandising Business

Answer 15

a business that buys and resells merchandise primarily to other merchandising businesses

Question 16

Cash Discount

Answer 16

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

Question 17

Cash Payments Journal

Answer 17

a special journal used to record only cash payment transactions

Question 18

Contra Account

Answer 18

an account that reduces a related account on a financial statement

Question 19

Cost of Merchandise

Answer 19

the amount a business pays for goods it purchases to sell

Question 20

Credit Limit

Answer 20

the maximum outstanding balance allowed to a customer by a vendor

Question 21

Discount Period

Answer 21

the period of time during which a customer may take a cash discount

Question 22

Due Date

Answer 22

a date by which an invoice must be paid

Question 23

General Amount Columns

Answer 23

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

Question 24

Inventory

Answer 24

a list of assets, usually containing the value of individual items

Question 25

List price

Answer 25

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

Question 26

Merchandise Inventory

Answer 26

the goods a business has on hand for sale to customers

Question 27

Net Price

Answer 27

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

Question 28

Periodic Inventory

Answer 28

a merchandise inventory evaluated at the end of a fiscal period

Question 29

Physical Inventory

Answer 29

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

Question 30

Perpetual Inventory

Answer 30

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

Question 31

Purchase Invoice

Answer 31

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

Question 32

Purchase on Account

Answer 32

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

Question 33

Purchase order

Answer 33

a form requesting that a vendor sell merchandise to a business

Question 34

Purchases Discount

Answer 34

when a company that has purchased merchandise on account takes a cash discount

Question 35

Purchases Journal

Answer 35

a special journal used to record only purchases of merchandise on account

Question 36

Requisiition

Answer 36

a form requesting the purchase of merchandise

Question 37

Schedule of Accounts Payable

Answer 37

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

Question 38

Special Amount Column

Answer 38

a journal amount column headed with an account title

Question 39

Special Journal

Answer 39

a journal used to record only one kind of transaction

Question 40

Terms of Sale

Answer 40

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

Question 41

Trade Discount

Answer 41

a reduction in the list price granted to a merchandising business