Accounting 1

• A business is an organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers.
• Accounting equation


  The fundamental equation that describes the relationship between a company's assets, liabilities, and owner's equity
• Financial analysis for decision making

  Describe and illustrate the use of the ratio of liabilities to owner's (stockholders) equity in evaluating a company's financial condition
• Business


  • An organization in which basic resources (inputs) such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers
  • Businesses come in all sizes, from a local coffee house to Starbucks (SBUX), which sells over $29 billion of coffee and related products each year
• Profit


  The difference between the amounts received from customers for goods or services and the amounts paid for the inputs used to provide the goods or services
• Types of businesses operating for profit

  • Service businesses
  • Retail businesses
  • Manufacturing businesses
• Service businesses

  • Delta Air Lines (DAL)
  • The Walt Disney Company (DIS)
• Retail businesses

  • Walmart Inc. (WMT)
  • Target Corporation (TGT)
• Manufacturing businesses

  • Ford Motor Company (F)
  • Merck & Co., Inc. (MRK)
• Twitter is a service company that provides a platform for individuals to post digital content
• A complete glossary of terms appears at the end of the text
• The role of accounting is to provide information about the business
• Accounting provides information about the economic performance of the business