| A | B |
|---|
| free enterprise system | A system in which individuals are free to produce the goods and service they choose. |
| profit | The amount earned above the amount of expense incurred to keep the business operating. |
| loss | The result when a business spends more money than it earns. |
| entrepreneur | A person who transforms ideas for products or services into real-world business. |
| capital | Money supplied by investors, banks, or owners of a business. |
| service business | A business that provides a needed service for a fee. |
| merchandising business | A business that buys raw materials and transforms them into finished goods and resells them to individuals or other businesses. |
| sole proprietorship | A business owned by one person. |
| partnership | A business owned by two or more persons, called partners, who agree to operate the business as co-owners. |
| corporation | A business organization recognized by law to have a life of its own. |
| charter | The legal permission, granted by a state, that gives a corporation certain rights and priviledges and spells out the rules under which the corporation is to operate. |
| manufacturing business | A business that buys raw materials and transfoms them into finished products by using labor and machinery. |
| accounting system | A system designed to collect, document, and report on business transactions. |
| manual accounting | A type of accounting in which information is recorded by hand. |
| computerized accounting | A type of accounting system in which information is recorded by entering it on a computer. |
| GAAP | The set of rules that all accountants use to prepare financial reports. |
| financial accounting | The type of accounting that focuses on reporting information to external users. |
| management accounting | The type of accounting that focuses on reporting information to the decision-makers of the business. |
| business entity | The accounting assumption that a business exists independently of its owner's personal holdings. |
| accounting period | The amount of time covered by an accounting report. |
| going concern | The accounting assumption that a business is expected to operate indefinitely. |
| financial reports | Documents that present summarized information about the monetary status of a business. |
