Inventory Terminology
This is a list of assets, usually containing the value of individual items.
What is Inventory?
These are the assets or other financial resources available to a business.
What is Capital?
These are amounts to be received in the future due to the sale of goods or services.
What are accounts receivable?
This is an invoice used as a source document for recording a purchase on account transaction.
What is a purchase invoice?
This is a ledger that is summarized in a single general ledger account and may be referred to as a subledger.
What is a subsidiary ledger?
This is a business owned by one person
What is proprietorship?
These are the goods a business has on hand for sale to customers.
What is merchandise inventory?
This is the price after the trade discount has been deducted from the list price.
What is net price?
This is a reduction in the list price granted to a merchandising business.
What is a trade discount?
This is a form requesting that a vendor sell merchandise to a business.
What is a purchase order?
This is an account in a general ledger that summarizes all accounts in a subsidiary ledger.
What is a controlling account?
These are the total shares of ownership in a corporation
What is capital stock?
This is a periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand.
What is physical inventory?
This is the period of time during which a customer may take a cash discount.
What is a discount period?
This is a transaction in which the items purchased are to be paid for later.
What is purchase on account?
This is a form requesting the purchase of merchandise.
What is a requisition?
This is an account that reduces a related account on a financial statement.
What is a contra account?
This is issued by a state when approving the formation of a corporation with the legal right for a business to conduct operations as a corporation.
What is a charter?
This is an inventory determined by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise.
What is perpetual Inventory?
This is the date by which an invoice must be paid.
What is a due date?
This is a deduction that a vendor allows on an invoice amount to encourage prompt payment.
What is a cash discount?
This is a listing of vendor accounts, account balances, and the total amount due to all vendors. Some businesses call this listing an accounts payable trial balance.
What is a schedule of accounts payable?
This is a journal amount column that is not headed with an account title.
What is the general amount column?
This is a legal document that identifies basic characteristics of a corporation, which is a part of the application submitted to a state to become a corporation.
What are articles of incorporation?
This is a merchandise inventory evaluated at the end of a fiscal period.
What is periodic inventory?
This is the maximum outstanding balance allowed to a customer by a vendor
What is a credit limit?
This is the shorthand phrase for the total invoice amount being paid within 30 days
What is n/30 or Net 30?
These are goods that a business purchases to sell.
What is merchandise?
This is the subsidiary ledger containing vendor accounts.
What is the accounts payable ledger
This is the main difference in the accounting records of proprietorships and corporations
What is the number of capital accounts?