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Questions and Answers
What are goods that a business purchases to sell?
What are goods that a business purchases to sell?
What is a business that purchases and sells goods called?
What is a business that purchases and sells goods called?
Merchandising Business
What is a merchandising business that sells directly to consumers called?
What is a merchandising business that sells directly to consumers called?
Retail Merchandising Business
What type of business buys and resells merchandise to retail merchandising businesses?
What type of business buys and resells merchandise to retail merchandising businesses?
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What is an organization with the legal rights of a person called?
What is an organization with the legal rights of a person called?
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What is each unit of ownership in a corporation referred to as?
What is each unit of ownership in a corporation referred to as?
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What term describes the total shares of ownership in a corporation?
What term describes the total shares of ownership in a corporation?
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Who is an owner of one or more shares of a corporation?
Who is an owner of one or more shares of a corporation?
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What is a journal used to record only one kind of transaction called?
What is a journal used to record only one kind of transaction called?
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What is the price a business pays for goods it purchases to sell called?
What is the price a business pays for goods it purchases to sell called?
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What is the amount added to the cost to determine the asking price?
What is the amount added to the cost to determine the asking price?
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What do you call a business from which merchandise is purchased?
What do you call a business from which merchandise is purchased?
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What type of transaction involves purchasing merchandise to be paid for later?
What type of transaction involves purchasing merchandise to be paid for later?
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What is a special journal used to record only purchases of merchandise on account called?
What is a special journal used to record only purchases of merchandise on account called?
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What do you call a journal amount column headed with an account title?
What do you call a journal amount column headed with an account title?
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What is an invoice used as a source document for recording a purchase on account transaction called?
What is an invoice used as a source document for recording a purchase on account transaction called?
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What is the agreement between a buyer and a seller about payment for merchandise called?
What is the agreement between a buyer and a seller about payment for merchandise called?
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What is a special journal used to record only cash payment transactions called?
What is a special journal used to record only cash payment transactions called?
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What is the deduction that a vendor allows on the invoice amount to encourage prompt payment?
What is the deduction that a vendor allows on the invoice amount to encourage prompt payment?
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What is a cash discount on purchases taken by a customer called?
What is a cash discount on purchases taken by a customer called?
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What do you call a journal amount column that is not headed with an account title?
What do you call a journal amount column that is not headed with an account title?
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What is the retail price listed in a catalog or on an internet site called?
What is the retail price listed in a catalog or on an internet site called?
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What is a reduction in the list price granted to customers called?
What is a reduction in the list price granted to customers called?
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What type of account reduces a related account on a financial statement?
What type of account reduces a related account on a financial statement?
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What do you call a petty cash on hand amount that is less than a recorded amount?
What do you call a petty cash on hand amount that is less than a recorded amount?
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What is a petty cash on hand amount that is more than a recorded amount called?
What is a petty cash on hand amount that is more than a recorded amount called?
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What do you call a return of goods from the buyer to the seller for cash or credit?
What do you call a return of goods from the buyer to the seller for cash or credit?
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What is the credit allowed for part of the purchase price of merchandise that is not returned called?
What is the credit allowed for part of the purchase price of merchandise that is not returned called?
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What is a form prepared by the customer showing the price deduction taken by the customer for returns and allowances?
What is a form prepared by the customer showing the price deduction taken by the customer for returns and allowances?
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Study Notes
Merchandise and Types of Merchandising Businesses
- Merchandise refers to goods purchased by a business for resale.
- A merchandising business operates by buying and selling goods.
- Retail merchandising businesses sell directly to end consumers who use the goods.
- Wholesale merchandising businesses act as intermediaries, buying from manufacturers and selling to retail businesses.
Corporate Structure and Ownership
- A corporation is a legal entity owned by multiple individuals, granting them rights akin to a person.
- Ownership in a corporation is represented by shares of stock, which are units of ownership.
- Capital stock encompasses the total number of shares issued by a corporation.
- Stockholders are individuals or entities that own one or more shares of a corporation.
Journals and Accounting Entries
- A special journal is dedicated to recording only one type of transaction, streamlining record-keeping.
- The cost of merchandise reflects the price a business pays for goods intended for resale.
- Markup is the additional amount added to the cost of merchandise determining the selling price.
Purchasing and Payment Transactions
- A vendor is a business entity from which merchandise or supplies are purchased.
- Purchase on account refers to transactions where goods are paid for at a later date.
- A purchase journal tracks only the purchases of merchandise made on credit.
- Special amount columns within journals are titled, aiding organization of entries.
Invoices and Payment Terms
- A purchase invoice serves as a source document for recording purchases made on account.
- Terms of sale outline agreements between buyers and sellers regarding payment conditions for merchandise.
- The cash payments journal is specific for documenting cash payment transactions.
Discounts and Pricing
- A cash discount incentivizes prompt payment by offering a deduction from the invoice amount.
- Purchase discounts allow customers a reduction in cash payable on purchases.
- The list price is the retail price displayed in catalogs or online marketplaces.
- Trade discounts are reductions on the list price offered to specific customers.
Accounting Adjustments and Returns
- A contra account reduces the balance of a related account in financial statements.
- Cash short indicates a petty cash amount that is less than the recorded figure.
- Cash over reflects a petty cash amount that exceeds the recorded figure.
- A purchase return occurs when goods are returned to the seller for cash or credit.
- A purchases allowance credits the buyer for price reductions on goods that were not returned.
- A debit memorandum is a form indicating price deductions taken by customers for returns or allowances.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of key accounting terms in Chapter 9 through this interactive flashcard quiz. Perfect for students looking to master essential vocabulary related to merchandising businesses. Enhance your understanding of concepts like merchandise and retail versus wholesale operations.
