Accounting Notes Chapter 2
Accounting Notes Chapter 2 ACTG 211
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This 3 page Class Notes was uploaded by Emily Foster on Tuesday February 10, 2015. The Class Notes belongs to ACTG 211 at University of Oregon taught by Perez in Fall. Since its upload, it has received 60 views. For similar materials see Accounting in Accounting at University of Oregon.
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Date Created: 02/10/15
Accounting Notes Chapter 2 Emily Foster people are free to produce the goods and services they choose free to use money as they please business owners can compete for business the right to own property money owned over and above the amount spent the amount that a business makes spent more than the pro t business maker who transforms ideas into products or services for the real world money supplied by investors banks or owners what you have invested owner39s equity money to operate a business Entrepreneurship m Cons Your own boss 0 Work long hours Opportunities for earning 0 Lose security of steady wages money and bene ts 0 Control your work schedule 0 Market your own service and 0 Choose the people you serve products 0 Select the people who work with 0 Pay your own operating you expenses Bene t from rewards of your 0 Must be motivated and own hard work energetic Choose your work hours 0 May lose money Business must in order to survive a business must earn a pro t Entrepreneurs take risks In order to make a pro t you must pay for more than simply raw materials cover all expenses Types of business 0 Service business Merchandising Manufacturing Forms of business oldest and most common form of business one single owner Accounting Notes Chapter 2 Emily Foster Easiest form of business study advantages and disadvantages from page 29 Pros easy to start get all the pro t total control over the business few regulations 2 or more owners Cons expertise is limited hard to get capital money to start business owner faces all the risks hard to attract talented employees Example one accounting rm has 1500 partners Pros easy to start pool of different talents more money available Cons Conficts between partners Profits must be shared Owners share all risks business organization that39s recognized by law must have permission from the state to operate people can buy stock on these businesses legal permission to operate a cooperation owned by the shareholders or stockholders Pros Easier to raise money Easy to expand Easy to transfer ownership Losses limited to investment Cons Costs more to start up Complex to organize More regulations Higher taxes An is designed to collect document and report of nancial transactions affecting the business STUDY generally accepted accounting principles a way to communicate nancial information in a form understood by everyone in business summarizing information about nancial status used to prepare nancial accounting reports Types of accounting accounting for external users people who are outside of the business who still make nancial decisions like a bank making a decision to give a business a loan not directly involved in daytoday operations accounting internal users of the business do daytoday operations must have information to make decisions within the business Assumptions of accounting exists from its owner39s personal holdings your business is separate from your personal things separate check books accounts etc can cover one month three months and one year monthly quarterly annually a period to keep a business39s records accountants assume that the business has an ability to survive and operate the accountants assume that the business will survive summarizing nancial status of a business
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