Accounting chapter 2 vocabulary
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19 terms
Terms | Definitions |
|---|---|
 accounting period | the period of time covered by an accounting report |
| accounting system | a system designed to collect, document, and report on bussiness transactions |
| business entity | the accounting assumption that a bussiness exsits independently of it's own personal holdings. |
| charter | the legal permission, granted by a state, that gives a corporation certain rights and privileges. |
| computerized accounting system | a type of accounting sysytem in which information is recorded by entering it into a computer. |
| corporation | a business organization recognized by law to have a life of its own |
| entrepreneur | a person who trsnsforms ideas for products or services into real-world businesses |
| financial accounting | the type of acconting that focuses on reporting information to external users. |
| finacial reports | documents that present summerized information about the financial status of a business. |
| free enterprise system | a system in which individuals are free to produce the goods and services they choose |
| GAAP | the set of rules that all accountants use to prepare finacial reports. |
| going concern | the accounting assumption that a business is expected to operate indeffinatly |
| management accounting | the type of accounting that focuses on reporting information to management. |
| manual accounting system | a type of accounting system in which information is processed by hand |
| manufacturing business | a business that buys raw materials and transforms them into finished products by using labor and machinery |
| merchandising business | a business thay buys finished goods and resells them to individuals or other businesses. |
| partnership | a business owed by two or more persons |
| service business | a business that provides a needed service for a fee |
| sole proprietorship | a business owned by one person |
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