LESSON 2

• Sole proprietorship - A form of business which owned by one person; the simplest, and most common form of business organization.
• Sole Proprietorship - It is not seperate from the owner. The business and the owner are inseparable (hindi mapapaghiwalay)
• Partnership - An association of two or more person who bind themselves to contribute money,property,or industry, to a common fund with the intention of diving profits among themselves
• Partnership - In this form of business organization the "OWNER IS CALLED A PARTNER"
• Partnership - It is governed by the Civil Code of The Philippines and sign Philippines and sign a formal business agreement called "ARTICLES OF CO-PARTNERSHIP"
• Partnership - In this form of business organization profit are divided among partners based on their agreed sharing
• Corporation - In this forms of business organization "THE OWNERS ARE CALLED STOCKHOLDERS OR SHARE HOLDERS"
• Corporation - Is a business organized as a seperate legal entity (artificial being) under corporation law with ownership divided into transferable shares of stocks
• Corporation - In this forms of business organization Begins it existence from the date the articles of Incorporation is approved by the SEC
• Corporation - In this form of business organization

  the voting rights of a shareholder is generally based on the percentage of ownership
• Corporation - In this forms of business organization the ownership is divided into shares and the value of one share may be denominated at a smaller amount, for example at PHP10 per share
• Corporation - In this forms of business organization the proof of ownership is evidenced by a stock certificate
• Cooperative - A duly registered association of persons with common bond of interest, voluntarily joining together to achieve social, economic and cultural needs
• Cooperative - In this forms of business organization "THE OWNERS ARE CALLED MEMBERS " who contribute equitably to the capital of the cooperative
• Cooperative - In this form of business the members are expected to patrinize their products and services
• Cooperative - It is regulated Regulated by the cooperative development Authority (CDA)
• TYPES OF BUSINESS ACCORDING TO ACTIVITIES

  • Service Business
  • Merchandising Business
  • Manufacturing Business
• Service Business - This type of business offers professional skills, advice and consultation.
• Service Business - Examples of this Business is : barber shops, beauty parlos, repair shops,banks,accounting ,law firms
• Merchandising Business - This type of business buys at whole sale and later sells the product at retail. They make profit by selling merchandise products or products at prices higher than their purchase costs
• Merchandising Business - Examples of this business are : Bookstores,sari-sari stores, hardware stores
• Merchandising Business - It is also known as "buy and sell"
• Manufacturing Business - This type of business buys raw materials and uses them in making new product therefore combining raw materials, labour and expenses into a product for sale later on.
• Materiality Principle - This principle includes all the assets that are immaterial to make a difference In the financial statements which the company should record as an expense
• Going Concern Principle - This means that the business is expected to continue indefinitely
• Time Period Principle - The financial statements are usually divided into specific time intervals. The business should report the financial statements appropriate to a specific period
• Monetary Unit Principle - Any amount involved in the business is stated into a single monetary unit
• Business Entity Principle - In this principle, there is a seperation and distinction of transactions between the business enterprise and it's owner or investor
• Cost Principle - An accounting principle wherein accounts should be recorded initially at cost as well as assets at their respective cash amounts at the time the assets was purchased
• Accrual Accounting Principle - In this principle, the revenue should ve recognize when earned regardless of collection. Same goes with expenses which are recorded when incurred regardless of payment
• Cash Basis Principle - Revenue is logged when collected, and expenses should be recorded when paid
• CasH Basis - It is not generally accepted principle nowdays
• Matching Principle - In this principle, cost should be matched with the revenue generated. It requires that the expenses incurred during the period be recorded in the same period in which the related revenues are earned
• Disclosure Principle - All necessary, relevant , and material information should be reported in this principle for transparency
• Conservatism Principle - This is also known as "prudence" assets and income should not be overstated, while liabilities and expenses should not be understated
• Objectivity Principle - In this concept, financial statements of an organization must be presented with supporting solid evidence-
• Objectivity Principle - The intent behind this principle is to keep the management and the department of accounting from making financial statements that are affected by their opinion and biases
• Forms Of business organization

  • Sole Proprietorship
  • Partnership
  • Corporation
  • Cooperative
• ACCOUNTING CONCEPTS AND PRINCIPLES

  (MGTMBCAMDCO) -

  • Materiality Principle
  • Going Concern Principle
  • Time Period Principle
  • Monetary Unit Principle
  • Business Entity Principle
  • Cost Principle
  • Accrual Accounting Principle
  • Matching Principle
  • Disclosure Principle
  • Conservatism Principle
  • Objectivity Principle