| A | B |
|---|
| accounting system | concerned with the process of recording and reporting financial information |
| business entity | exists independently of its owner's personal holdings |
| capital | money invested in a business by an owner |
| corporation | a business organization that is recognized by law to have a life of its own |
| entrepreneur | willing to take the risks of running a business |
| financial accounting | type of accounting that focuses on reporting information to external users |
| accounting period | the time period covered by an accounting report |
| GAAP | Generally Accepted Accounting Principles (the rules set by FASB) |
| going concern | a business expectation to operate indefinitely |
| loss | businesses that spend more than they receive |
| managerial accounting | accounting for internal users of accounting information |
| manufacturing business | a business that transforms raw material into products |
| merchandising business | a business that buys finished products and then sells them |
| partnership | has at least two owners |
| profit | the amount of money earned over and above the amount spent to keep a business operating |
| service business | a business organized to operate by providing profesional services for a fee |
| sole proprietorship | has one owner |
| for-profit | a business that operates with the goal of earning money for the owners |
| non-for-profit | a business that operates for a purpose other than making a profit; goal is to balance income and expenses |
| public accounting firms | provides clients with accounting services including independent audits |
| CPA | certified public accountant |
| free enterprise system | people are free to produce the goods and services they choose; individuals are free to use their money as they wish; business owners must attract customers for company to thrive |
| FASB | Financial Accounting Standards Board (issues the rules to prepare financial reports) |
