Accounting Chapter 2

This type  of business buys raw materials and transforms them into finished products. 

Advantages: easy to set up, all profits go to owner, owner has total control 

Advantages: easy startup, pooled skills & talents, more money available

Disadvantages: costs more to start, more complex to organize, more regulations, higher taxes

This type buys finished products & resells them to individuals or other businesses. 

The Garrett State Bank is what type of business?

The framework, or set of rules, accountants follow to prepare financial reports.

Ambassador Steel is what type of business?

In this, people are free to produce the goods and services they choose.

Disadvantages: Limited expertise, hard to raise money, owner has all risk

The accounting assumption that a business is expected to survive and operate indefinitely

Advantages: easier to raise money, easy to expand, easy to transfer ownership

This gives a corporation legal permission to operate.

This type of business has a single owner.

Walmart is what type of business?

DeKalb Memorial Hospital is what kind of business?

The accounting assumption that a business exists independently of its owners personal holdings

This focuses on reporting information to external users.

Disadvantages: risk of partner conflict, shared profits, shared risks

This focuses on reporting information to management (internal users).

Summarized information about the financial status of a business. 

A person who transforms ideas for products and services into real-world businesses. 

This type of business is owned by two or more people.

The period of time covered by an accounting report

Designed to collect, document, and report on financial transactions affecting the business

Metal Technologies is what type of business?

This type of business is recognized by law to have a life of its own.

The amount of money earned over and above the amount spent to keep the business operating.

In this, accounting information is processed by hand.

Money that investors, banks, or business owners supply.

When a business spends more than it makes it is operating at a _____ .

This type of business provides a needed service for a fee.

Kroger Supermarket is what type of business?

In this, the financial information is recorded by entering it into a computer.