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18 Cards in this Set
- Front
- Back
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free enterprise system
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a system where people are free to produce the goods and services they choose.
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profit
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the amount of money earned over and above the amount spent to keep the business operating.
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loss
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when a business spends more than they earn, they operate at a loss.
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entrepreneurs
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transform ideas for products or services into real-world businesses.
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capital
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money supplied by investors, bankers, or owners of a business
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service business
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provides a needed service for a fee.
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merchandising business
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buys finished products and resells them to individuals or other businesses.
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manufacturing business
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buys raw materials, such as wood or iron ore
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sole proprietorship
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a business owned by one person.
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partnership
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a business owned by two or more persons.
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corporation
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a business organization that is recognized by law to have a life of its own.
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charter
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gives a corporation certain rights and privileges. The charter spells out the rules under which the corporation is to operate.
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accounting system
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designed to collect, document, and report on financial transactions affecting the business.
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manual accounting system
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the accounting information is processed by hand.
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computerized accounting system
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the financial information is recorded by entering it into a computer.
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GAAP (generally accepted accounting principles)
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a set of rules that all accountants use to prepare their reports.
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financial reports
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summarized information about the financial status of a business.
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financial accounting
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focuses on reporting information to external users.
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