Chapter 1

Accounting

- a service activity

-It`s function is to provide qualitative information

- is an information system that measures, processes and communicates financial information about an
economic entity

Amatino Manucci

-the inventor of double-entry bookkeeping

Fra Luka Pacioli

-a Franciscan friar and and a celebrated mathematician

- is generally associated with the introduction of double-entry bookkeeping.

TYPE OF BUSINESS

 SERVIVE
 TRADER
 MANUFACTURE
 RAW MATERIALS
 INFRATRACTURE
 FINANCIAL
 INSURANCE

FORMS OF BUSINESS ORGANIZATIONS

Sole Proprietorship

-This business organization has a single owner called proprietor who generally the manager.

-Thus, the accounting records of the sole proprietorship do not include the proprietor`s personal
financial records.

Partnership

-is a business owned and operated by two or more persons who bind themselves to contribute, money,
property, or industry to a common fund, with the intention of dividing the profit among themselves.

-Accounting considers the partnership as a separate organization, distinct from the personal affairs of
each partners.

Corporation

-is a business owned by stockholders.

-it is an artificial being created by operation of law, having the rights of succession and the powers,
attributes and properties expressly organize by law or incident to its existence.

-The stockholders are not personally liable for the corporation`s debt.

-corporation is a separate legal entity.

MICRO, SMALL, MEDIUM ENTERPRISES

MICRO

-Are those assets below P1.5 million

-not more than 9 employees

SMALL

-are those assets above P1.5 million to P15 million and employ 10 to 99 workers

MEDIUM

-Are those assets above p15 million to P100 million and employ 100 to 199 workers

ACTIVITIES OF BUSINESS ORGANIZATIONS

Financial Activities

-organization require financial resources to obtain other resources used to produce goods and services.