BRFABM- 1

• Definition of accounting 


  Accounting is the process of identifying, recording, summarizing and interpreting economic transactions for decision making.
• What is the purpose of accounting?


  The purpose of accounting is to record, identifying, summarizing and provide clear and accurate financial information to help individuals and organizations make informed decisions.
• Nature of Accounting can be defined as the act of recording, identifying and summarising money-related matters in a detailed manner that can be easily interpreted
• Forms of Business Organization


  • Sole Proprietorship
  • Partnership
  • Corporation
  • Cooperatives
• Sole Proprietorship

  A business that can be one owner and controlled by an individual
• Advantages of sole proprietorship


  • You're the boss
  • Easy to form
  • Full control
  • Quick decision
  • You keep all the profits
  • Start-up costs are low
  • You have maximum privacy
  • Establishing and operating your business is simple
  • It's easy to change your legal structure later if circumstances change
  • You can easily wind up your business
• Disadvantages of sole proprietorship


  • Small size
  • Unlimited liability
  • Risk of wrong decisions
  • All the responsibility for making day-to-day business decisions is yours
  • Stress & health issues
• DTI (Department of Trade and Industry)


  Government agency that businesses need to register with
• Registering a single proprietorship business with the DTI

  1. Provides the business with a legal identity

  2. Gains the rights to use the business name
• A business name (BN) registration is not a license to operate a business
• DTI ( Department of Trade and Industry )


  It is necessary to register your single proprietorship business with the DTI to provide it with a legal identity and gain the rights to use your business name. Remember that a business name (BN) registration is not a license to operate a business.
• Securities and Exchange Commission (SEC)


  It is essential for a Partnership or a Corporation to register with the SEC in order for them to be treated as a legal or judicial entity
• Cooperative Development Authority (CDA)


  The Cooperative Development Authority, shortened as CDA, is a government agency attached to the Department of Trade and Industry in charge to promote the viability and growth of cooperatives as instruments of equity, social justice and economic development
• Partnership 


  -an arrangement between two or more people to oversee business operations and share its profits and liabilities.
• What types BUSINESS PERMITS Is sole proprietorship Registred?

  Answer DTI
• What types of business permit is registered the partnership?

  Answer is SEC
• Partnership advantage and disadvantages?

  Advantages of partnership:

  Additional knowledge

  Share liabilities

  New perspective

  More business opportunities

  Less paper work

  Less financial burden

  Disadvantages of partnership

  Disagreements

  Shared profits
• 
  

  Corporation

  Owned by many shareholders, maximum is fifteen (15) in number, minimum two (2)
• Corporation advantages and disadvantages

  Advantages of corporation

  • limited liability

  •Asset protection

  • Separate legal entity

  •Transferability of ownership

  Disadvantages of corporation

  •Double taxation

  •more requirements
• What type of business permit registered the corporation?

  Answer: SEC
• Accounting concept and principle

  1. Separate Business Entity
  2. Actual Basis
  3. Historical Cost
  4. Going concern
  5. Matching principle
  6. Full disclosure
  7. Materiality
  8. Conservation
  9. Consistency
  10. Time period
  11. Cost-benefit
• Separate Business Entity

  A company that functions independently from the owner
• Accrual Basis

  Revenue is recorded when earned, expenses are recorded when incurred, regardless of when cash is received or paid
• Historical Cost


  Value of an asset on the balance sheet recorded at its original cost when acquired by the company
• Going concern


  An accounting term for a company that has the resources needed to continue operating indefinitely until it provides evidence to the contrary
• Matching principle

  Matching the revenues with expenses to know the profit of the business
• Full disclosure


  Sufficient information for informed
• Cooperatives -own by its members and it's form by common interests or goal of the members. Maximum 10 members and minimum is no, no spicify maximum the cooperative.
• Cooperatives

  is registered in (CDA) cooperative Development and Authority.