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Accounting Chapter 2
Term | Definition |
---|---|
accounting period | The period of time covered by an accounting report. |
accounting system | A system designed to collect, document, and report on business transactions. |
business entity | The accounting assumption that a business exists independently of its owner’s personal holdings. The accounting records and reports are maintained separately and contain financial information related only to the business. |
charter | The legal permission, granted by a state, that gives a corporation certain rights and privileges and spells out the rules under which the corporation is to operate. |
computerized | A type of accounting system in which information is recorded by entering it into a computer. |
accounting system | A system designed to collect, document, and report on business transactions. |
corporation | A business organization recognized by law to have a life of its own. |
entrepreneur | A person who transforms ideas for products or services into real-world businesses. |
financial accounting | The type of accounting that focuses on reporting information to external users. |
financial reports | Documents that present summarized information about the financial status of a business. |
free enterprise system | A system in which individuals are free to produce the goods and services they choose. |
GAAP | Documents that present summarized information about the financial status of a business. |
going concern | The accounting assumption that a business is expected to operate indefinitely. |
management | The type of accounting that focuses on reporting information to management; often referred to as accounting for internal users of accounting information. |
accounting | Activities performed in an accounting period that help the business keep its records in an orderly fashion. |
manual accounting | A type of accounting system in which information is processed by hand. |
system | a set of things working together as parts of a mechanism or an interconnecting network. |
manufacturing | A business that buys raw materials and transforms them into finished products by using labor and machinery. |
business | a person's regular occupation, profession, or trade. |
merchandising | A business that buys finished goods and resells them to individuals or other businesses. |
partnership | A business owned by two or more persons, called partners, who agree to operate the business as co-owners. |
service business | A business that provides a needed service for a fee. |
sole proprietorship | A business owned by one person. |