Business Environment
Types and Forms
Accounting System
Decisions and Reports
Assumptions
100
People are free to produce the goods and services they choose.
What is Free Enterprise System.
100
Name the 3 types of Business Operations
Service Business Merchandising Business Manufacturing Business
100
The system designed to collect, document, and report on financial transactions affecting the business.
What is an accounting system.
100
Explain the difference between financial accounting and management accounting.
Financial accounting is for external users and management accounting is for internal users.
100
What are the 3 important assumptions included in GAAP?
Business Entity Accounting Period Going Concern
200
Business must do 2 things to survive.
profit and attract people to take risks in it.
200
Name the 3 Forms of Business Organizations
Sole-Proprietorship Partnership Corporation
200
Explain the difference between a manual accounting system and a computerized accounting system.
In a manual accounting system accounting information is processed by hand and a computerized accounting system uses a computer to record transactions.
200
The type of accounting that uses reports to make an investment decision?
What is Financial Accounting
200
Exists independently of its owner's personal holdings.
What is business entity?
300
The role of this person transforms ideas for products or services into real-world business.
What is the role of an entrepreneur
300
What is needed for a corporation to have legal permission for operation
A charter
300
The set of rules used to prepare financial reports issued by the Financial Accounting Standards Board.
What is GAAP?
300
The type of report prepared for managers involved in making the day-to-day operating decisions.
Management accounting reports
300
What 3 periods can the accounting period cover by an accounting report
one month, three months, or one year.
400
What are the 3 areas of expertise that contribute to successful business ownership?
Organizational skills marketing knowledge accounting skills
400
What is an advantage and disadvantage of a partnership.
Advantages: Easy startup, pooled skills and talents, more money available. Disadvantages: Risk of partner conflict, shared profits, shared risks.
400
Outline how the accounting system works.
Input of source documents Processing of tasks Output of Accounting reports
400
Why do managers need accounting information?
so they can decide what to do, how to do it, when to do it, and whether the results match the plans for the future.
400
The assumption that a business has the ability to survive and operate indefinitely.
What is going concern?
500
Provide 2 pros and 2 cons of being an entrepreneur.
pros: being your own boss, opportunities to earn money, create & control work schedule, choose those you serve, choose who works with you, benefit from rewards of hard work, you choose your own work hours. Cons: work long hours, lose secure wages & benefits, you market your own services/products, Pay your own expenses, must be motivated everyday, possibility of losing money.
500
How do organizers of corporations raise money to expand.
They sell shares of stock to hundred or even thousands of people.
500
Provide 3 outputs of Financial and Management reports
Financial condition Results of operations Investments by and distributions to owners
500
Name 3 situations in which people use financial accounting reports.
Investments to determine if business is profitable Individual or institutions to determine if business can repay the loan. Governments to determine if businesses pay the proper taxes. Workers, consumers, union leaders, and competitors to see the performance of business
500
The universal language of business
What accounting is known as.
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