General
Who does financial accounting benefit?
External Users
Name the four types of businesses
Sole proprietorship, partnership, limited-liability partnership, corporation
Explain the entity assumption.
The organization stands alone as it's own economic unit
Who does managerial accounting benefit?
Internal users such as managers
How much liability does a sole proprietorship have?
unlimited liability
Explain the going concern principle.
We assume that the company will continue operating for the foreseeable future.
Why is accounting important to business?
measures business activities, creates financial reports, and aids decision makers
Does a corporation have unlimited liability?
NO!
Explain the Historical Cost Assumption
Assets are recorded at the purchase price, not the market price
Who uses accounting information?
individuals, investors, creditors, regulatory bodies, and government agencies
Give an example of a sole proprietorship and a corporation
SI will judge
Explain the stable-monetary unit assumption
The assumption that the purchasing power of the dollar will remain the same.
Accounting is a _______.
information system
What kind of tax does a corporation pay?
Double taxation
What does GAAP stand for?
Generally Accepted Accounting Principles