Accounting Ch. 2 vocab
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Created by:
jaimesda864 on November 14, 2011
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20 terms
Terms | Definitions |
|---|---|
 free enterprise system | An economic system in which individuals depend on supply and demand and the profit margin to determine what to produce, how to produce, how much to produce, and for whom to produce. The quest for improvement financially and materially motivates consumers and producers. |
| profit | the advantageous quality of being beneficial "I hope to get a big profit out of the chocolates im selling this weekend" |
| loss | the act of losing "I had a big loss in my companys stock market" |
| entreprenuer | a person who risks his money to begin a business " An entrepreneur can sell anything he wants to sell" |
| capital | a seat of government |
| service business | a business that performs an activity for a fee "An example of a service business would be Fiesta Hair Salon" |
| merchandising business | a business that purchases and sells goods "Walmart is definitely a merchandising business." |
| manufacturing business | a business engaged in manufacturing some product "US Granules is considered a manufacturing business." |
| sole proprietorship | business owned by one person "Sole proprietorship businesses are really hard to run" |
| partnership | a contract between two or more persons who agree to pool talent and money and share profits or losses "My dad and uncle own a business considered as a partnership" |
| corporation | slang terms for a paunch "Many people invest in large corporations to make money" |
| charter | a document incorporating an institution and specifying its rights |
| accounting system | a bookkeeper's chronological list of related debits and credits of a business |
| GAAP | a collection of rules and procedures and conventions that define accepted accounting practice |
| financial reports | Summarized information about the financial status of a business |
| financial accounting | Accounting information and analyses prepared for people outside the organization. |
| management accounting | focuses on reporting information to management. "A management account helps managers in a business know how the business is running so far" |
| business entity | exists independently of its owner's personal holdings |
| accounting period | A period of time covered by an accounting report "An accounting period lets you see how your business is doing from year to year" |
| going concern | the accounting assumption that a business is expected to operate indefinitely "The going concern can be very difficult to operate with at times" |
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