CH2 ACCOUNTING

LOSS

If a business spends more money to operate than it earns from the sale of goods/services, it is operating at a(n) _____.

FREE ENTERPRISE SYSTEM

In a(n) _____, people are free to produce the goods/services they choose.

GOING CONCERN

Following the _____ accounting assumption, the accountant prepares reports as though the business will operate indefinitely.

PROFIT

A business is operating at a(n)_____ if it earns more money than it spends.

MANUFACTURER

A business that produces items to sell to individuals and other businesses is known as a(n) _____.

SERVICE BUSINESS

A business that provides a needed service for a fee is called a(n) _____

PARTNERSHIP

A business that two or more people agree to own together is a(n) _____.

SOLE PROPRIETORSHIP

A business with a single owner is a(n) _____.

MERCHANDISER

A(n) _____ buys finished goods and sells them to individuals or other businesses.

CORPORATION

A(n) _____ is a business organization that must get permission from the state to operate.

ENTREPRENEUR

A(n) _____ is an individual who transforms ideas for products/services into real-world businesses.

CHARTER

A(n) _____ is the legal document giving a business the right to operate as a corporation.

ACCOUNTING SYSTEM

The _____ is designed to collect, document, and report on the financial transactions affecting the business.

ACCOUNTING PERIOD

The _____ is the period of time covered by an accounting report.

BUSINESS ENTITY

Under the _____ accounting assumption, a business owner must keep the financial records for the business separate from personal records.

MANAGEMENT ACCOUNTING

_____ is concerned with preparing information for internal users.

FINANCIAL ACCOUNTING

_____ is concerned with preparing reports for external users such as investors or creditors.

CAPITAL

_____ is money invested in a business by its owner(s) or the money provided by banks or investors.

FINANCIAL REPORTS

_____ summarize information about the financial status of a business.

GAAP

_____are the rules accountants follow when recording and reporting accounting information.