Chapter 1 Notes - Business & Accounting PDF
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Uploaded by GainfulParallelism
Alayna Witte
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Summary
These notes cover fundamental concepts in business and accounting, including different types of businesses, the purpose of accounting, and the various users of accounting information. It also defines key terms such as assets, liabilities and equity, and explains how accounting principles relate to business decisions and operations.
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Chapter 1 Notes - Complete the notes below. 1. What is a business? Business - an economic entity that aims to earn a profit for its owners 2. What are the three basic types of business or organizations? a. 1. Service Company b. 2. Merchandising Company c. 3. Manufactu...
Chapter 1 Notes - Complete the notes below. 1. What is a business? Business - an economic entity that aims to earn a profit for its owners 2. What are the three basic types of business or organizations? a. 1. Service Company b. 2. Merchandising Company c. 3. Manufacturing Company 3. Define each business or organization listed above. a. 1. Earns revenue by performing a service b. 2. Earns revenue by buying inventory from a manufacturer and selling it c. 3. Produces and then sells a finished product by combining material, labor, and overhead. 4. What is the purpose of accounting? To help people make decisions about a business’ economic activities. 5. Define the textbook definition of accounting. The process of identifying, recording, and communicating the economic events of an organization to interested users. 6. List each user and uses of accounting below. Please use bullet points to list each. Management - plan, control, and evaluate business operations Investors - Use date to decide whether to buy, hold, or sell their financial interests in a business Creditors - Use accounting info about a business to evaluate the risk of lending them money Suppliers - Use accounting info about a business to evaluate the risk of granting them credit Other people include financial analysts, labor unions, taxing authorities, and regulatory agencies. 7. Why should I study accounting? An education in Accounting can help you if you become a business owner or investor in the future, or even if you become an employee at a company that offers a retirement plan where money is invested for you in business stocks. 8. What are assets? Assets - Things that have value and are owned by a person (often money) 9. What are liabilities? Things a business is responsible for, such as debts or obligations. 10. Define stockholders equity. Stockholders Equity - The remaining assets available to shareholders after all liabilities are paid. 11. Define the term equity. Equity - The ownership of a public company or an asset.
