The Five Basic Entities That Make Up Any Business Are

question 27

Multiple Choice

The five basic entities that make up any business are suppliers, customers, employees, products and services, and:

• A)its environment.
• B)manufacturing and production.
• C)sales and marketing.
• D)invoices and payments.

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Definitions:

Bonds Payable

Bonds payable are long-term liabilities represented by bonds that a company issues to investors, promising to repay the principal along with interest at specified dates.

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, typically with predetermined dividend payments but usually without voting rights.

Financing Activities

Transactions that involve changes in the size and composition of the equity capital or borrowings of a company.

Indirect Method

A technique for preparing the cash flow statement, where net income is adjusted for changes in balance sheet accounts to calculate cash flow from operating activities.