Key terms Flashcards
accountant
- (upper management level) reports and analyzes transactions
- a professional person who interprets data and prepares reports; and managing decisions.
accounting
gathering and preparing financial information about a business or other organization
fiscal period
the period of time (12 months) over which a business reports earnings
service business
sells services to customers, does not make or sell a product
merchandising business
buys goods and re-sells them for a profit
manufacturing business
buy raw materials and produces the product
sole proprietorship
owned by only one person
pros
- keep all profits, total control
cons
-limited expertise, hard to raise money
partenership
two or more people share the ownership of a business
pros
- extra ideas, start-up cost low
cons
- disagreements, profits must be shared
corporation
form of business owned by shareholders
pros
- easy to raise money, easy to expand
cons
- higher taxes, costs more to set up
accounting clerk
- junior employee
- identifies and records economic events
- activities include: records transactions, maintains computer records, banking, report generation
accounting cycle
the total set of accounting procedures that must be carried out during each fiscal period
auditing
an examination of the accounting records of an individuals or organizations accounts
bookkeeping
the routine tasks of an accounting clerk
non-profit business
meets social needs but not for the purpose of making money
financial statement
records that show the financial activities of a business.
financial statements = balance sheet and income statement
