chapter 1 businesses Flashcards
define business
an organization in which basic resources (inputs) are assembles and processed to provide goods and services to the customers.
the objective of ________ businesses is to earn a __________
most (not all)
profit (revenue- expenses)
Define profit
the difference between the amounts received from a customer for a good or a service and the amount paid for the inputs used to provide the goods and services.
types of businesses
service business
merchandising business
manufacturing business
Forms of businesses
sole trader
partnership
corporation
limited liability company
the role of accounting
provides data for users to use in operating the business
define accounting
an information system that provides reports to users about economic activities and condition of the business.
the process of accounting (5)
identify
assess
design
record
prepare
2 types of accounting
Managerial accounting- the area of accounting that provides mostly to internal users with information.
Financial Accounting- the area of accounting that provides mostly to external users with information.
objective of the 2 types of accounting
Provide relevant and timely data for mostly _________(internal or external) users to make decisions.
Ethics
Are moral principles that guide the conduct of individuals.
SOX
Sarbanes- Oxley Acts of 2002
- penalties for wrong doing
Sarbanes Oxley Acts of 2002 standards (4)
independence
corporate
responsibility
disclosure
GAAP
Generally Accepted Accounting Principles
FASB
Financial Accounting Standards Board
