Lecture Exam Terms

Lecture Exam Terms - Lecture Exam Terms Profit occurs when...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture Exam Terms Profit- occurs when businesses sell products or services for more than they cost to produce Loss- occurs when businesses sell products or services for less then they cost to produce Sole Proprietorship- business form in which a single person is the sole owner and is personally responsible for all the profits and losses of the business Partnerships- similar to sole proprietorships, except that this legal structure allows for more than one owner Partnership agreement- legal agreement between two or more business partners that outlines core business issues Limited partnership- much like a general partnership except for one important fundamental difference; the law protects the limited partner from being responsible for all the partnership’s losses Corporation- artificially created legal entity that exists separate and apart from those individuals who created it and carry on its operations Shareholder- business owners Limited Liability- means that the shareholders are not personally liable for the losses incurred by the corporation For profit corporations- primarily focus on making money, and all profits and losses are shared by the business owners Not for profit corporations- usually exist to accomplish some charitable, humanitarian, or educational purpose, and the profits and losses are not shared by the business owners Reasons businesses choose to incorporate- limited liability, unlimited life, transferability of shares, ability to raise investment capital
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Limited liability corporation (LLC)- hybrid entity that has the legal protection of a corporation and the ability to be taxed (one time) as a partnership Accounting department- provides quantitive information about the finances of the business including recording, measuring, and describing financial information Bookkeeping- the actual recording of the business’s transactions, without any analysis of the information Accounting- analyzes the transactional information of the business so the owners and investors can make sound decisions Financial accounting- preparing financial reports that provide information about the business’s performance to external parties such as investors, creditors, and tax authorities Managerial accounting- analyzing business operations for internal decision making and does not have to follow any rules by standard-setting bodies such as GAAP Transaction- is an exchange or transfer of goods, services, or funds involving two or more people Source document- describes the basic transaction data such as its date, purpose, and amount and includes cash receipts, canceled checks, invoices, customer refunds, employee time sheet, etc. Financial Statements-
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 7

Lecture Exam Terms - Lecture Exam Terms Profit occurs when...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online