Probably Accounting
What is an account?
a record that organizes and summarizes all transactions related to a specific financial item (cash, equipment, inventory, etc.)
How is net income calculated?
Revenue - Expenses
What is the accounting equation?
Assets = Liability + Owner's Equity
What are two examples of accounting periods?
month, quarter, year
What types of business structures have limited liability?
Corporations and LLCs (and LLPs)
What is the capital of Vermont?
Montpelier
What does the income statement report?
Revenues, Expenses, and Net Income for a specific time period (month, quarter, or year)
a measurable amount a company owes to a creditor and is expected to repay in a specified amount of time
AKA: What a company OWES
Examples: bank loans, inventory bought on credit (like with a credit card!)
What is another word for revenue?
sales
What types of business structures have unlimited liability?
Sole proprietorships and partnerships
Name 2 groups of people who use financial statements
business owners, lenders/creditors, investors, potential investors, accountants, government agencies, consultants
What is revenue?
Money earned for selling goods or services to customers
What is an asset?
an economic resource that a company controls and is expected to provide a future benefit
AKA (what a company OWNS)
Examples: cash, equipment, supplies, buildings
What are the top 3 most populated countries in the world?
China, India, and The USA
What is a corporation?
a business structure that is a separate legal entity from the owner's of the business
What is the largest US company by revenue?
What are expenses?
All costs of doing business that are necessary to earn revenue
What is owner's equity?
the owner's investment in the company
What is unlimited liability?
The owner of the business has full legal responsibility for the business including the debts, legal proceedings, and all other financial commitments
Which business structure is always taxed at the company level and the individual (owner) level?
Corporation
What is an accounting information system (AIS)?
a structure that a business uses to collect, store, manage, process, retrieve, and report its financial data so it can be used by a company’s financial information users such as accountants, managers, auditors, etc.
Revenue: $53,000
Expenses: $60,000
Net Income (Loss): ?????
Calculate the company's net income or loss
Net Loss: ($7,000)
Assets = $100,000
Liabilities = $35,000
Owner's Equity = ???
What is the balance of Owner's Equity?
$65,000
What is another word for net income?
profit
Jodi, Joni, and Jori want to start a business but they want limited liability. They don't have a significant amount of money to start the business and the business is not large. What business structure should they choose?
Limited Liability Company (LLC)