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Accounting Chapter 2
| Question | Answer |
|---|---|
| accounting period | An accounting period is a specific time frame—such as a month, quarter, or year—that a business uses to record, organize, and report its financial activities |
| accounting system | a digital or manual framework used to track, record, and report a business's financial transactions |
| business entity | the legal structure of an organization that conducts commercial activities |
| charter | a formal legal or official document that grants rights, sets rules, or establishes the structure and purpose of an organization, city, or institution |
| computerized accounting system | a software application that automates the recording, processing, and reporting of financial transactions within a business |
| corporation | a legal business structure that exists completely separate from its owners |
| entrepreneur | a person who starts a business and takes on financial risks to earn a profit |
| financial accounting | the systematic process of recording, summarizing, and reporting a business’s financial transactions to create standardized statements for external users |
| financial reports | A financial report is a formal document that summarizes the financial performance, health, and cash movement of a business over a specific period |
| free enterprise system | an economic model where private businesses operate with minimal government control |
| GAAP | GAAP stands for Generally Accepted Accounting Principles |
| going concern | a business that is financially stable enough to continue operating for the foreseeable future without the threat of liquidation or bankruptcy |
| management accounting | provides financial and non-financial data to internal managers to help them plan, make decisions, and improve business performance |
| manual accounting system | a traditional bookkeeping method where financial transactions are recorded, calculated, and managed by hand using physical paper records, journals, and ledgers instead of digital accounting software |
| manufacturing business | a company that transforms raw materials, parts, or components into finished, tangible products using labor, tools, and machinery |
| merchandising business | a company that buys finished products and resells them to customers for a profit |
| partnership | a formal arrangement where two or more people, groups, or organizations work together to share responsibilities, resources, profits, and losses |
| service business | a company that sells intangible Salesforce Small Business Guide products, expertise, or personal labor rather than physical goods |
| sole proprietorship | an unincorporated business owned and run by one person where there is no legal distinction between the owner and the business |
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Akamae27
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