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48 Cards in this Set

  • Front
  • Back
an organization in which basic resources, such as materials or labor are assembled and processed to provide goods or services to customers
the difference between the amounts received versus the amounts paid
manufacturing businesses
change basic inputs into products that are sold to individual customers
merchandising businesses
sell products to customers
service businesses
provide services rather than products to customers
business owned by one person
business owned by two or more individuals
business organized under state or federal statutes as a seperate legal taxable entity
limited liability corporation
business that acts like a corporation but can be taxed like a partnership
business strategy
an integrated set of plans and actions designed to enable the business to gain an advantage over its competitors, and in doing so, to maximize profits
low-cost strategy
a business strategy that designs and produces products or services of acceptable quality at a cost lower than that of its competitors
differentiation strategy
a business strategy that designs and produces products or services that possess unique attributes or characteristics for which customers will pay a premium price
the way a business adds value for its customers by prcessing inputs into a product or service
inputs>business processes>products or services>customer value
business stakeholder
person or entity having an interest in the economic performance of the business
individuals who the owners have authorized to operate the business
provide services to the business in exchange for a paycheck
invest resources in the business by extending credit
collect taxes from companies
an information system that provides reports to stakeholders about the economic activities and condition of a business
moral priniciples that guide the conduct of individuals
private accounting
accountants employed by a business firm
public accounting
accountants who provide servcies on a fee basis
the chief accoutant in a business
Certified Public Accountant(CPA)
public accountants who have met a state's education, experience and examination requirments
financial accounting
accounting concerned with the recording and reporting of economic data and activies for a business
managerial accounting
uses both financial accounting and estimated data to aid management in running day-to-day operations and in planning future operations
business entity concept
limits the economic data in the accounting system to data related directly to the activities of the business
cost concept
basis for entering the exchange price, or cost of something
objectivity concept
requires that the accounting records and reports be based upon objective evidence
unit of measure concept
requires that all economic data be recorded in dollars
resources owned by a business
rights of creditors represent debts of the business
owners' equity
rights of the owners
accounting equation
Assets = Liabilites + Owners' Equity
business transaction
an economic event that directly changes an entity's financial condition or directly affects it
capital stock
stock issued to owners
prepaid expenses
items such as supplies that will be used in the future
received money for rendering services or goods to a customer
retained earnings
owners' equity created by the business operations
fees earned
revenue from providing services
the amount used in the process of earning revenue
income statement
summary of the revenue and expenses for a specific period of time
retained earnings statement
summary of the changes in the earnings retained in the corporation for a specific period of time
balance sheet
a list of the assets, liabilities, and owners' equity as of a specific date, usually at the close of the last day of a month or a year
statement of cash flows
a summary of cash receipts and cash payments for a specifc period of time
net income
the excess of the revenue over the expenses
net loss
the excess of the expenses over the revenue
ratio of liabilities to stockholders' equity
=total liabilites/total stockholders' equity