Studied by 3 people
Operates to earn money for its owners
for-profit
Provides accounting services to clients
public accounting
A person that transfers ideas into products or services
entrepreneur
Summarizes information about the financial status of a business
financial reports
The amount of time covered by an accounting report
accounting period
Assumption that businesses will operate forever
going concern
Money invested by owner(s) or the money provided by banks or investors
capital
A legal document giving a business the right to operate as a corporation
charter
People are free to produce the goods and services they choose
free enterprise
Buys finished goods and sells them to individuals or other businesses
merchandising
True or False- Only businesses that earn profit will have the economic resources to continue to operate
false
True or False- All types of businesses sell a product
false
True or False- One advantage of owning your own business is that any financial gain from operating the business is yours
true
True or False- The corporation is the easiest form of business to organize
true
True or False- A partnership can be owned by more than 2 individuals
true
True or False- Service businesses are not intended to operate for a profit
false
True or False- GAAP are the rules for accounting
true
True or False- For accounting purposes, a business entity is separate from its owners
true
True or False- There is not a national test to become a CPA
false
True or False- Target is an example of a merchandising business
true
What does CPA stand for
Certified Professional Accountant
What do you have to do to become a CPA
4-year degree and pass the national test
Example of a service business
Pink Lemonade
Example of a merchandising business
Target
2 Advantages of a sole proprietorship
all profit to yourself and it is easy to start up
2 Disadvantages of a sole proprietorship
hard to raise money for and responsible for anything that goes wrong (unlimited liability)
Note 
Flashcard (31)