forms of business organization

• A corporation is an artificial person that has the right to sue or be sued, hold property, enter into contracts, pay taxes, make profits, and suffer losses.
• • Owners are called stockholders or shareholders
  • Management delegated to the Board of Directors
  • Regulated by the Securities and Exchange Commission (SEC)
  • Cooperatives:
  • Registered association of persons with common interests
  • Members contribute equitably to the capital
  • Members expected to patronize products and services
  • Regulated by the Cooperative Development Authority (CDA)
• Forms of Business Organization:

  • Sole Proprietorship:
  • Owned by one person
  • Simplest and most common form of business organization
  • Regulated by the Department of Trade and Industry
  • Partnership:
  • Owned by two or more persons
  • Details outlined in articles of partnership
  • Profits divided among partners
  • Owners are called partners
  • Corporation:
  • Business organized as a separate legal entity
  • Ownership divided into transferable shares of stocks
  • Creation governed by the Corporation Code of the Philippines
• • Businesses can be classified under more than one type
• Types of Business According to Activities:

  • Service:
  • Offers professional skills, advice, and consultations
  • Examples: barber shops, beauty parlors, banks
  • Merchandising:
  • Buys at wholesale and sells at retail
  • Profit from selling products at higher prices
  • Also known as "buy and sell"
  • Examples: bookstores, sari-sari stores, hardware
  • Manufacturing:
  • Buys raw materials to make new products
  • Combines raw materials, labor, and expenses
  • Examples: shoe manufacturing businesses, car manufacturing plants
• • Cost matched with revenue generated
  • Disclosure principle:
  • All relevant and material information reported
  • Conservatism principle:
  • Assets and income not overstated, liabilities and expenses not understated
  • Materiality principle:
  • Immaterial assets recorded as expenses
• Accounting Concepts and Principles:

  • Business entity principle:
  • Business separate from owner or investor
  • Going concern principle:
  • Business expected to continue indefinitely
  • Time period principle:
  • Financial statements divided into specific time intervals
  • Monetary unit principle:
  • Amounts stated in a single monetary unit
  • Objectivity principle:
  • Financial statements presented with supporting evidence
  • Accrual Accounting Principle:
  • Revenue recognized when earned, expenses recognized when incurred
  • Matching principle: