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Services
It offers one’s time/service as its main product rather than physical goods
Trading
Buys and sells good without changing their physical form
Can be called merchandising or retailing
Manufacture
A type of business that buys raw materials and process them in to final products.
They design products
Raw materials
a type of business that grows or extracts raw materials
Infrastructure
A type of business that sells the utilization of infrastructure
Financial
A type of business that receive deposits, lend, and invest money
Insurance
A type of business that pools premiums of many to meet claims of a few
Sole proprietorship
a form of business that is owned by only one individual
It is the most common and simplest form of business organization
Partnership
a business owned and operated by 2 or more persons (up to 15) who entered into a contract to carry of the business and divide among themselves the earnings
Corporation
`It is a form of business owned by stockholders
it is created by operation of law rather than a contract
Assets = liabilities + equity
What is the basic accounting equation?
Assets
These are the economic resources you control that have resulted from past events and can provide you with economic benefits
Liabilities
These are your present obligations that have resulted from past events and can require you to give up economic resources when settling them
Equity
It is simply assets minues liability.
Other terms for this are “capital” and “net worth”
Assets = liabilities + equity + income - expenses
What is the expanded accounting equation?
Income
This is the increase in the economic benefits during the period in the form of increase in assets, or decrease in liabilities, that result in the increase in equity, excluding those relating to investments by the business owner
Expenses
are decreases in economic benefits during the period in the form of decreases in assets, or increases in liabilities, that result in the decrease in equity, excluding those relating to the distributions to the business owner.
Account
It is the basic storage of information in accounting
It is a record of the increases and decreases in a specific item of asset, liability, equity, income or expense
Debit
Refers to the let side of the account.
It is sometimes referred to as values received
Credit
Refers to the right side of the account
Sometimes referred to as the value parted with
Balance
The difference between the total debits and credits
Chart of accounts
It is a list of all the accounts used by the business
Balance sheet
Shows the financial position of the business
Income statement
Shows the profot or loss of a business
Allowance for bad debts
the aggregate amount of estimated losses from uncollectible accounts receivable
Inventory
represents the goods that are held for sale by a business
unearned income
items related to income that were collected in advanced before they are earned
owner’s drawings
This account is used to record the temporary withdrawals of the owner during the period. At the end of the accounting period, any balance in this account is closed to to the “Owner’s capital'“ account
Service fees
revenues earned from rendering services
sales
revenues earned from the sale of goods
interest income
revenues earned from the issuance of interest-bearing receivables
gains
income earned from the sale of assets or from enhancements of assets (except inventory) or decreases in liabilities that are not classified as revenue
Cost of sales
Represents the value of inventories that have been sold during the accounting period
Freight-out
represents the seller's’ costs of delivering goods to customers.
Bad debt expense
the amount of estimated losses from uncollectible accounts receivable during the period
Depreciation expense
The portion of the cost of a depreciable asset that has been allocated to the current accounting period
Accumulated depreciation
The total amount of depreciation expenses recognized since the building or equipment was acquired and made available for use
Note 
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