Business & Ownership
A merchandising business that sells to those who use or consume the goods.
What is a Retail Merchandising Business?
A form requesting that a vendor sell merchandise to a business.
What is a Purchase Order?
The maximum outstanding balance allowed to a customer by a vendor.
What is a Credit Limit?
A corporation exists independent of its owners.
What is True?
Conducted by counting, weighing, or measuring items on hand.
What is a Physical Inventory?
Each unit of ownership in a corporation.
What is a Share of Stock?
: A form requesting the purchase of merchandise (often internal).
What is a Requisition?
An account that reduces a related account on a financial statement.
What is a Contra Account?
The petty cash account "Cash Short and Over" is a permanent account.
What is False? (It is a temporary account).
Normal balances for contra accounts are always this in relation to their related accounts.
What is opposite?
A business that buys and resells merchandise primarily to other merchandising businesses.
What is a Wholesale Merchandising Business?
A listing of vendor accounts, account balances, and the total amount due to all vendors.
What is a Schedule of Accounts Payable?
An account in a general ledger that summarizes all accounts in a subsidiary ledger.
What is a Controlling Account?
The contra account "Purchases Discount" has a normal debit balance.
What is False? (It has a normal credit balance).
Merchandise with a list price of $1,500 is purchased for $900 on Aug 1. Terms are 2/10, n/30. Payment is made on Aug 17. This is the amount paid.
What is $900.00? (The discount window was missed).
An organization with the legal rights of a person which many persons or other corporations may own.
What is a Corporation?
A journal used to record only one kind of transaction.
What is a Special Journal?
An inventory determined by keeping a continuous record of increases, decreases, and balance on hand.
What is a Perpetual Inventory?
A merchandising business places "Purchases" in the Operating Expenses section of the income statement.
What is False? (It is in the Cost of Goods Sold section).
Daily Double:
When replenishing a $300 petty cash fund, the custodian has $224 in receipts and $74 in cash. This is the amount debited to Cash Short and Over.
What is $2.00? ($300 - $74 = $226 needed; $226 - $224 in receipts = $2 shortage).
The owner of one or more shares of stock.
What is a Stockholder?
A legal document that identifies the basic characteristics of a corporation.
What are Articles of Incorporation?
A reduction in the list price granted to a merchandising business.
What is a Trade Discount?
$500: The terms of sale 1/10, n/30 mean that 10% of the invoice may be deducted if paid within 30 days.
What is False? (It means 1% may be deducted if paid within 10 days).
Supplies bought for use in a business (not for resale) are recorded in this account.
What is the Supplies account?