 | Term | Definition |
| |
accounting |
an information system for measurment and reporting of the transformation of resources into goods and services and the sale or transfer of these goods and services to customers |
| |
audit |
a detailed, systematic investigation of a company's accounting records and procedures for the purpose of determining the reliability of financial reports |
| |
business organization |
organizations that sell their goods and services to make a profit |
| |
contracts |
legal agreements for the exchange of resources and services |
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corporation |
a legal entity with the right to own, buy and sell property; and the right to sell stock |
| |
creditor |
a person or organization who loans financial resources to an organization |
| |
effective business |
an organization that is successful in providing goods and services demanded by customers |
| |
efficient business |
an organization that keeps the costs of resources consumed in providing goods and services low relative to the selling prices of these goods and services |
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financial accounting |
the process of preparing, reporting, and interpreting accounting information that is provided to external decision makers |
| |
generally accepted accounting principles [ GAAP ] |
standards developed by professional accounting organizations to identify appropriate accounting and reporting procedures |
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governmental and nonprofit organizations |
organizations that provide goods or, more typically, services without the intent of making a profit |
| |
information |
facts, ideas, and concepts that would help us understand the world |
| |
management [ managerial ] accounting |
the process of preparing, reporting, and interpreting accounting information for use by an organization's internal decision makers |
| |
manufacturing companies |
organizations that produce goods that they sell to consumers, to merchandising companies, or to other manufacturing companies |
| |
market |
any location or process that permits resources to be bought and sold |
| |
merchandising companies [ retail companies ] |
organizations that sell to consumers goods that are produced by other companies |
| |
moral hazard |
the condition that exists when agents have superior information to principals and are able to make decisions that favor their own interests over those of the principals |
| |
mutual agency |
a legal right that permits a partner to enter into contracts and agreements that are binding on all members of a pertneship |
| |
organization |
a group of people who work together to develop, produce, and/or distribute goods or services |
| |
partnerships |
a business owned by two or more persons, with no legal identity distinct from that of the owners |
| |
profit |
the difference between the price a seller receives for goods or services and the total cost to the seller of all resources consumed in developing, producing, and selling those goods or services during a particular period |
| |
proprietorships |
a business owned by one person, with no legal identity distinct from that of the owner |
| |
return on investment [ ROI ] |
the amount of profit earned by a business that could be paid to owners |
| |
risk |
uncertainty about an outcome |
| |
service companies |
organizations that sell services rather than goods |
| |
shareholders [ stockholders ] |
owners of a corporation |
| |
stakeholders |
those who have an economic interest in an organization and those who are affected by its activities |
| |
stock |
a certificate of ownership that represents an equal share in the ownership of a corporation |
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