Unit 2 test material Flashcards
What is accounting?
it is the proccess of recording, analyizing and interpreting the financial activities of a business
What are transactions?
they are any business activity that involves changing the financial position or net worth of a company or person
What is bookkeeping?
the recording of all these transactions
What is a double entry accounting system?
each transaction consists of changing at least 2 accounts
What is an asset?
things of value that we own. Ex. house, car, cash, toys, electronics, etc.
What is a liability?
they are things, debts, cash, that we owe to other people or companies. ex. mortages, bank lons, accounts payable, etc.
What is owner’s equity?
it is the net worth of a company or person. Owner’s Equity= Assets-Liabilities
What is net worth?
Net worth= amount we own- amount we owe or net worth= assets- liabilities
What are the 4 steps of the production process?
- Purchasing
- Processing
- Quality Control
- Grading
What is purchasing?
the main job is to aquire the needed products at the best rpice. They are usually raw materials. /some large companies have their own purchasing departments.
What is processing?
converts one thing into another. This may require large amounts energy depending on what is being made.
What is quality control?
ensures that the product confrosm to certain standards. Standards are usually set by the company, but some products (food, medicine) must meet government standards.
What is grading?
Some products are checked for size and quality against fixed standards for the product catergory.
What are the 6 factors of Production?
- Management
- Natural Resources
- Raw Materials
- Labour
- Capital
- Information
What is management?
allocates the companies resources, bothcapital and human an deciedes what to buy, to make and to hire
What is natural resources?
everything is made of 6 types of natural resources: fishing/trapping, agriculture, mining, water, fuel/energy, and forestry
What is raw materials?
are unfinished goods from nature used in manufactereuring finished goods. Almost all natural resources we consume were once raw materials
What is labour?
Includes all physcial and mental work needed to produce gods and services
What is capital?
is the money invested in a business. Liquid capital: cash, stocks, bonds, accounts payable. Non-liquid: buildings, equipment, property, etc.
What is information?
to produce goods and services competitively in a global economy requires information: about new technology, customers, competition, political conditions, etc.
What are the 4 functions of management?
- Planning
- Organizing
- Leading
- Controlling
What is planning?
setting realistic short and long term goals and deciding how to achieve them. The long term economic goals of most businesses is to maximize profit and msot short term goals are expressed as sales or income targets. Managers must develop strategies to achieve these goals
What is organizing?
arranging people and tasks to carry out the businesses plans. Each department hires employees and writes job descriptions. Many companies are organized into 3 levels of managemtnt (see levels of management note)
What is leading?
Focus employees on achieving objectives and motivate staff to accomplish them. Leading teams and managing confict or stress. Communicating effectively and encouraging staff which increases productivity. A good leader communicates directions clearly and effectively.
