Accounting Chapter 2: The World of Business
- Service business: sells a service, such as
accounting, lawn maintenance, painting, legal advice, as opposed to
selling a product.
- Proprietorship: a
business owned by only one person, or a husband and wife.
full control (owner makes all decisions)
full liability (owner’s personal property can be taken to cover debts and
- Accounting is: planning, analyzing, and
interpreting financial information. See dictionary.com for more information.
- Accounting system: a planned process for
providing financial information that will be useful to management (how
data will be stored, analyzed and interpreted). Usually computerized
software, such as Quicken, Peachtree, SAP, etc. See Wikipedia.com for more information.
- Accounting records: organized summaries of a
business’s financial activities. Usually called “The Books”.
Good accounting can help
business make good financial decisions.
When records are not
accurate, business may:
- have trouble getting financing and/or
- final inaccurate reports with the IRS or
- end up in failure and/or bankruptcy.
- Financial Statements: Printed records of a company's financial transactions and condition. (Book definition: Financial reports that summarize the financial condition and operations of a business. p6)
- Free Enterprise definition and video (1:42) at Investopedia
- The Promise of Free Enterprise at Youtube
- What in an Entrepreneur? video at Youtube
- 50 Entrepreneurs share priceless advice at Youtube
- Entrepreneurship 101: Pros and Cons of Starting a Business
for Recent College Grads at
- The Best and Worst Things About Being an Entrepreneur video at Youtube (2:01)
- Benefits of Incorporating article and video (2:02) at incorporate.com