Accounting Semester 2 Final Review With Latest Solutions

Free Enterprise System - People are free to produce the goods and services they choose Profit - When a business earns more money than it spends Loss - When a business spends more money to operate than it earns from the sale of goods and services Entrepreneurs - Transform ideas for products or services into real world businesses Capital - Money invested in a business by its owners or the money provided by a business or investors Service business - Provides a needed service for a fee Merchandising business - Buys finished products and resells them to individuals or other businesses Manufacturing business - A business that produces items to sell to individuals and other businesses Sole Proprietorship - Business with a single owner. The most common form of business organization Partnership - A business owned by two or more persons, who agree to operate as co-owners Corporation - A business that must get permission from the state to operate Charter - Legal document giving a business the right to operate as a corporation Accounting System - A system designed to collect, document, and report on financial transactions affecting the business GAAP - Generally Accepted Accounting Principles. Rules accountants follow when recording and reporting accounting information