Accounting chapter 2 vocabulary

19 terms by lappy1427

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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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