finance ch. 1
Terms
undefined, object
copy deck
- business organization
- organizations that sell their goods and services to make a profit
- management [ managerial ] accounting
- the process of preparing, reporting, and interpreting accounting information for use by an organization's internal decision makers
- 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
- market
- any location or process that permits resources to be bought and sold
- 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
- generally accepted accounting principles [ GAAP ]
- standards developed by professional accounting organizations to identify appropriate accounting and reporting procedures
- return on investment [ ROI ]
- the amount of profit earned by a business that could be paid to owners
- contracts
- legal agreements for the exchange of resources and services
- stakeholders
- those who have an economic interest in an organization and those who are affected by its activities
- effective business
- an organization that is successful in providing goods and services demanded by customers
- merchandising companies [ retail companies ]
- organizations that sell to consumers goods that are produced by other companies
- financial accounting
- the process of preparing, reporting, and interpreting accounting information that is provided to external decision makers
- partnerships
- a business owned by two or more persons, with no legal identity distinct from that of the owners
- mutual agency
- a legal right that permits a partner to enter into contracts and agreements that are binding on all members of a pertneship
- information
- facts, ideas, and concepts that would help us understand the world
- governmental and nonprofit organizations
- organizations that provide goods or, more typically, services without the intent of making a profit
- organization
- a group of people who work together to develop, produce, and/or distribute goods or services
- proprietorships
- a business owned by one person, with no legal identity distinct from that of the owner
- 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
- manufacturing companies
- organizations that produce goods that they sell to consumers, to merchandising companies, or to other manufacturing companies
- creditor
- a person or organization who loans financial resources to an organization
- shareholders [ stockholders ]
- owners of a corporation
- audit
- a detailed, systematic investigation of a company's accounting records and procedures for the purpose of determining the reliability of financial reports
- corporation
- a legal entity with the right to own, buy and sell property; and the right to sell stock
- service companies
- organizations that sell services rather than goods
- stock
- a certificate of ownership that represents an equal share in the ownership of a corporation
- 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
- risk
- uncertainty about an outcome