| A | B |
|---|
| profit | The amount of revenue earned above the expenses incurred to operate the business. |
| loss | The result of a company's spending more than it receives in revenue. |
| entrepreneur | A person who transforms ideas for products or services into real-world businesses. |
| capital | Money supplied by investors, banks, or owners of a business. Refers to the dollar value of assets contributed to the business. |
| service business | Provides a needed service for a fee. |
| merchandising business | A business that buys goods and then sells those goods for a profit. |
| manufacturing business | A business that transforms raw materials into finished products through the use of labor and machinery. |
| sole proprietorship | A business owned by one person. |
| free enterprise system | A system in which people are free to produce the goods and services they choose. |
| partnership | Business owned by two or more persons, called partners, who agree to operate the business as co-owners. |
| corporation | Business organization that is recognized by law to have a life of its own. |
| charter | A legal written permission that gives a corporation certain rights and privileges and spells out the rules under which the corporation is to operate. |
| accounting system | A systematic process of recording and reporting the financial information resulting from business transactions. |
| manual accounting system | A system in which accounting information is recorded and processed by hand. |
| computerized accounting system | A system in which financial information is recorded by entering it into a computer. |
| GAAP | A set of rules used by accountants to prepare financial reports. |
| financial reports | Summarized information about the financial status of a business. |
| financial accounting | Reporting information to external users. |
| management accounting | Reporting information to management, often referred to as accounting for internal users of accounting information. |
| business entity | The business exists independently of its owner's personal holdings. |
| accounting period | A period of time covered by an accounting report. |
| going concern | The assumption that a business entity will continue to operate for an indefinite time. |
