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Accounting 1 DHS (glencoe) chapter 2


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Has one owner
sole proprietorship
Time period covered by an accounting report
accounting period
Money invested in a business by an owner
money earned over and above the amount of money needed to keep a business operating
Businesses that spend more money than they receive operate at a __________
something designed to collect,document,and report on financial transactions affecting a business
accounting system
Transforms ideas for products or services into a business.
Motivated self-starters willing to take risks.
Accounting for external users of accounting information
financial accounting
acronym for Generally Accepted Accounting Procedures
Accounting for internal users of accounting information
managerial accounting
Accounting for internal users ofaccounting information
managerial accounting
exists independently of its owner's personal holdings
business entity
a business expected to operate into the future
A going concern
Type of business that buys finished products and then sells them
merchandising business
Type of business that transforms raw materials into products.
manufacturing business
A business organization that has a life of its own and is recognized by law
Type of business that provides professional services for a fee
service business
Summarized information about the financial status of a business
financial reports
Financial information recorded by entering it into a computer
computerized accounting system
Accounting information processed by hand
manual accounting system
Legal permission obtained from a state for a corporation to operate as a business. It spells out the rules the corporation must abide by.
System in which people are free to produce goods and services they choose, and use their money in a manner they choose
free enterprise system
Name 3 types of businesses
Name 3 forms of businesses
sole proprietorship
What is the Free enterprize System based on?
Individual freedoms
What is a key element of the free enterprize system?
competition among businesses
In order for a business to continue to operate, what do they have to do?
Make a profit
What type of a business operator is willing to take risks and make things happen?
What are some traits of an entrepeneur?
strong desire to succeed, ability to solve problems
creative ideas
business owned by stockholders
business owned by one person
sole proprietorship
business owned by 2 or more people
What are three important accounting assumptions?
Business entity
going concern
accounting period
Why would an individual use a financial accounting report?
To decide whether or not invest in a company

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