Accounting Chapter 2
Order by
21 terms
Terms | Definitions |
|---|---|
 free enterprise system | people are free to produce the goods and services they choose |
| profit | the amount of money earned over and above the amount spent to keep the business operating |
| loss | businesses that spend more money than they earn |
| entrepreneurs | transform ideas for products or services into real-world business |
| capital | money supplied by investors, banks, or owners of a business |
| service business | provides a needed service for a fee |
| merchandising business | buys finished products and resells them to individuals or other businesses |
| manufacturing business | buys raw materials, such as wood or iron ore and transforms them into finished products through the use of labor and capital |
| sole proprietorship | a business owned by one person |
| partnership | a business owned by two or more persons, who agree to operate the business as co-owners |
| corporation | a business organization that is recognized by law to have a life of its own |
| charter | legal permission, that gives a corporation rights and privileges |
| accounting system | designed to collect, document, and report on financial transactions affecting the business |
| manual accounting system | the accounting information is processed by hand |
| computerized accounting system | the financial information is recorded by entering it into a computer |
| Generally Accepted Accounting Principles | set of accounting rules |
| financial accounting | focuses on reporting information to external users |
| management accounting | focuses on reporting information to management, also referred to as accounting for internal users |
| business entity | exists independently of its owner's personal holdings |
| accounting period | a period of time covered by an accounting report |
| going concern | a business is expected to understand |
First Time Here?
Welcome to Quizlet, a fun, free place to study. Try these flashcards, find others to study, or make your own.
Set Champions
Scatter Champion
17.4 secs by ichigo1569
Space Race Champion
1,560 points by jacob_pomroy