Chapter 1

• Recommended Tips in Retaining Customer Loyalty

  1.) communication

  2.) Selling

  3.) give and take is a social motivation that makes a sustainable business operation

  4.) Companies should show exceptional customer services in order to win support from them

  5.) Loyalty Programs
• Economic Order Quantity (EOQ) - gives the manager most economical order to be made by the company
• Ordering cost - costs that will be incurred in placing the order of raw materials to the suppliers. 
• Carrying costs - costs to maintain the safety of raw materials and maintenance of quality
• Transportation model - it requires understanding about the sources where to get the products or materials and the destination where these products or materials will be brought.
• Transportation model - also identify the fastest way of delivering the product or materials to its destination.
• Business re-engineering - this makes stronger financial conditions that is a must for all business enterprise in order to survive the highly competitive environment of business.
• Accounting - this is the language of the business
• Accounting - is a process of accumulating cost, revenues, resources, liabilities, and owner's equity using concepts and principles.
• Basic concepts and Principles

  1. Entity concept
  2. Objectivity principle
  3. Cost principle
  4. Accounting period
  5. Going concern principle
• Entity concept - only the business transactions of the company must be recorded in its books of accounts.
• Objectivity principle - business transactions of the company should be properly supported by evidence like receipts.
• Accounting Period - observing a cut-off period that consist of 12 months.
• Two types of Accounting Period

  1. Calendar Period
  2. Fiscal period
• Calendar period - consisting of 12 months that will end on december 31.
• Fiscal period - consisting of 12 months that will end on any day other than december 31
• Going concern principle - this principle assumes that the moment the business will start its commercial operations, the business is assumed to operate for an indefinite period of time.
• According to philippine accounting standards, financial statements should have:

  1. Feedback value
  2. Predictive value
• Feedback value - the income statement will give the feedback to the owner's expectation
• Predictive value - when financial statements are further analyzed, they can also make predictions regarding business operations
• Components of financial statements

  1. the report of independent public accountant
  2. statement of management responsibility
  3. The income statement
  4. The statement of comprehensive income
  5. Statement of financial condition
  6. Statement of cash flows
  7. Statement of changes in equity
  8. Notes to the financial statement
• The report of independent public accountant. the financial statements are to be certified by a licensed certified public accountant who will express an opinion as to its fairness and if it's free from any material miss statement. the opinion of the cpa is vital for the users of the fs.
• the opinion of the cpa may be any of the following:

  1. unqualified opinion. the financial statements are fairly presented in all material respects.
  2. qualified opinion. the financial statements are fairly presented but with some qualification.
  3. adverse opinion. the financial statement does not accurately reflect the financial status and help of the business.
  4. disclaimer of opinion. the auditor did not express an opinion on the financial statement being examined.
• statement of management responsibility. the management takes full responsibility for the fs. the cpa merely checks the fs then express an opinion on it.
• the income statement. the statement that will show the results of business operations. it shows whether the business is gaining profit or encurring loss
• the statement of comprehensive income. contains income which are not yet realized but might be relevant to users of the fs.
• statement of financial condition. the statement that shows the assets, liabilities, and capital of the business
• statement of cash flows the statement. where one can see the sources of cash of the business and how the same was used.

  it is divided into three parts:

  1. operating activities
  2. investment activities
  3. financing activities
• statement of changes in equity. shows the changes in the owner's capital.

  two factors that cause changes in capital:

  1. operations representing the net income generated by the business
  2. additional investment by the owner
• notes to the financial statement. the income statement and statement of financial condition are generally presented by the line items. the details of these lines items are normally available in the notes of the financial statements.
• examples of computer software:

  1. POM-QM - a software for producing or operations management, quantitative methods, management science, end operations research. this package is the most user friendly available.
  2. QuickBooks (bookkeeping, invoicing, billing, payments payroll, and point of sale) - this softwares can speed up the work and make the information available ahead of time with much more accuracy.
• Cost principle - business transactions must be recorded in company's book at an amount that the company has actually paid for.
• 4P's & 4C's

  Product - Customer

  Place - Convenience

  Price - Cost

  Promotion - Communication