Terms Accounting

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Merchandise

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Goods that a business purchases to sell.

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Merchandising business

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A business that purchases and resells goods.

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Retail merchandising business

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

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Wholesale merchandising business

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A business that buys and resells merchandise primarily to other merchandising businesses.

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Corporation

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

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Capital

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The assets or other financial resources available to a business.

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Share of stock

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A unit of ownership in a corporation.

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Stockholder

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The owner of one or more shares of stock.

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Capital stock

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The total shares of ownership in a corporation.

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Articles of incorporation

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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;

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Charter

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A state approves the formation of a corporation by issuing a charter, the legal right for a business to conduct operations as a corporation.

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Vendor

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A business from which merchandise, supplies, or other assets are purchased.

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Subsidiary ledger

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A ledger that is summarized in a single general ledger accounts. Accountants often refer to a subsidiary ledger as a subledger.

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Accounts payable ledger

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The subsidiary ledger containing vendor accounts.

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Controlling account

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An account in a general ledger that summarizes all accounts in a subsidiary ledger.

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Inventory

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A list of assets, usually containing the value of individual items.

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Merchandise inventory

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The goods a business has on hand for sale to customers.

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Perpetual inventory

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An inventory determines by keeping a continuous record of increases, decreases, and the balance on hand of each item of merchandise.

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Periodic inventory

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A merchandise inventory evaluated at the end of a fiscal period.

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Physical inventory

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A periodic inventory conducted by counting, weighing, or measuring items of merchandise on hand.

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Cost of merchandise

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The amount a business pays for goods it purchases to sell.

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Requisition

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A form requesting the purchase of merchandise.

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Purchase order

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A form requesting that a vendor sell merchandise to a business.

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Special journal

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A journal used to record only one kind of transaction.

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Purchase on account

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

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Purchases journal

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A special journal used to record only purchases of merchandise on account.

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Special amount column

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A journal amount column headed with an account title.

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Purchase invoice

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

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Terms of sale

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An agreement between a buyer and a seller about payment for mechandise.

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Due date

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A device used to record the dates and times of every employee's arrivals and departures.