Business Accounting QUARTER 3 | S.Y.

2023-2024

☆ Opening and Managing self-owned

Lesson 1: Entrepreneurship business
⤷ Businesses that are being
☆ It is a process of actions of an managed by others for the benefit
entrepreneur who is always in search of of the owners do not fall within the
something new to exploit new ideas into sphere of entrepreneurship.
gainful opportunities by accepting the risk
and uncertainty of the enterprise (De
Guzman, 2018) TYPES OF BUSINESS: Forms of
★ It is a science of converting ideas into Ownership
business (Abad, 2009)

Sole Proprietorship (Reg. w/ DTI)

Business vs Entrepreneurship
★ The simplest and easiest business to
● Businesses focus more on providing
organize.
products or services for the purpose of
☆ Controlled and owned by an
making profit (not wealth-creating
individual/entrepreneur
venture)
★ The owner is the sole responsible of all the
● Entrepreneurship on the contrary
liabilities of the business
focuses on generating new value, and
☆ The sole proprietors are considered single
this value could be social, emotional,
taxpayers.
aesthetic, and/or financial.
★ Single ownership
☆ No sharing of profit and loss
Salient Features of Entrepreneurship
★ One man’s capital
☆ Art of Correct Practices
☆ Unlimited Liability
⤷ There is constant change which
★ Less legal formalities
denotes movements and
☆ One man control
innovation.
☆ Wealth-Creating Venture
Partnership (Reg. w/ SEC)
⤷ Entrepreneurship is operating within
★ It is owned by two or more persons who
the concept of wealth creation
contribute resources into the entity
rather than profit generation.
☆ Partners divide the the profits of the
☆ Provides Valuable Goods and Services
business among themselves
⤷ The entrepreneur defines value
★ They have mutual agreement on how the
from the perspective of the buyers
decisions will be made and on how future
and not only from his/her own
partners will be admitted and how
because what is valuable to the
arguments will be resolved.
entrepreneur may not be of any
☆ Partnerships can be general or limited
value to the customers.

Page 1 Grade 10 | Semester 1 | Quarter 3 | Business Accounting Good Luck !

Corporation (Reg. w/ SEC)
★ It has a distinct legal personality separate
from its owners.
☆ Private corporations may have a minimum
of five members with at least one member
which is a natural born Filipino and a
citizen of the country.
★ It is owned and established under the
Corporation Code of the Philippines and
regulated by the SEC.
☆ The minimum paid-up capital required of
corporations in the Philippines is PHP
5,000.00.
★ Types of Corporation
⤷ Stock Corporation
⤷ Non-stock Corporation
Cooperative (Reg. w/ CDA)
★ A cooperative is a business organization
owned by a group of individuals and is
operated for their mutual benefit.
☆ The persons making up the group are
called members.
★ Cooperatives may be incorporated or
unincorporated
RA no. 9501 - An Act to promote Entrepreneurship by
Strengthening Development and Assistance Programs
to Micro, Small and Medium Scale Enterprises
SEC. 3. Micro, Small and Medium Enterprises (MSMEs) as
Beneficiaries. —
MSMEs shall be defined as any business activity or
enterprise engaged in industry, agribusiness and/or
services, whether single proprietorship, cooperative,
partnership or corporation whose total assets, inclusive
of those arising from loans but exclusive of the land on
which the particular business entity’s office, plant and
equipment are situated, must have value falling under
the following categories:
Micro : not more than ₱3,000,000
Small : ₱3,000,001 - ₱15,000,000
Medium : ₱15,000,001 - ₱100,000,000
Page 2 Grade 10 | Semester 1 | Quarter 3 | Business Accounting
How significant is Entrepreneurship in the
economy of the country?
☆ It encourages competitiveness and
thereby challenges entrepreneurs to keep
improving their products and services.
★ It helps find an entrepreneurial niche in the
world market.
☆ It helps hasten the economic recovery
process of the Philippines during financial
turmoil or crackdown.
★ It facilitates the smooth flow of money in
the local market.
☆ It assists the national government in its
desire to have favorable economic ratings
in the world market.
Types of Business according to the
Nature of Activities
● Service Business - this provides intangible
goods or services to customers.
☆ ex: accounting firms, law firms
○ Merchandising Business - usually generate
profit by providing markup price on their
goods available for sale.
- sell tangible products; buy and sell
- buys finished or almost finished
goods from their supplier then
resells them to customers
☆ ex: bookstores, clothing stores,
department stores, grocery
● Manufacturing Business - manufacturers
or producers
- buy materials, convert them into
products, and then sell the
products to other companies or to
the final customers
☆ ex: URC, Susie’s Cuisine, San
Miguel Corp, furniture businesses,
shoe makers, potteries
○ Agriculture and Mining Companies - these
companies are engaged in producing or
exploration of raw or natural materials
such as plants.
Good Luck !
 ● Hybrid Business - multinational businesses
are companies that may be classified in
more than one type of business
☆ ex: restaurants, salons

☆ Department of Trade and Industry (DTI) -

business and name registration
★ Bureau of Internal Revenue (BIR) -
business tax
☆ Securities and Exchange Commission
(SEC) - registration and supervision of
corporations and securities
★ Cooperative Development Authority
(CDA) - register all types of cooperatives

Page 3 Grade 10 | Semester 1 | Quarter 3 | Business Accounting Good Luck !


Lesson 2: Accounting
The American Institution of Certified Public
Accountants (AICPA) defines accounting as..
⤷ The art of recording, classifying, and
summarizing in a significant manner and
in terms of money, transactions and
events which are, in part at least of
financial character, and interpreting the
result thereof.
Accounting - a service to business/organizations.
★ Accounting is a tool to measure the
financial position of any entity involved in
economic activity. Accounting is an aid to
management. It is a system that keeps
record of financial events and analyzes
them for presenting reports of the financial
results and position of an economic entity.
USERS OF ACCOUNTING INFO
● Board of Directors
○ Owners & Managers
● Employees
○ Business Partners & Stake-holders
● Creditors/Lenders
○ Government Agencies

Financial Financial Info Non-financial / invalid

★ Monetary value
Gasoline of delivery vehicle Purchase Request
⤷ Tangible
⤷ Intangible Electric consumption Savings of the workers
Example: Supermarket
☆ Tangible - cash/check/products Payment for the Kitchen Salary of the workers
★ Intangible - services of the supplies

employees/right to use space

AC units of the business

Functions of Accounting in Business

★ Accounting is a discipline, well-equipped
with techniques and methods through
which all types of transactions measurable
in terms of money or money’s worth can
be recorded, classified and summarized in
a proper and systematic way.
☆ Accounting helps present and explain
income, expenditure, profit-loss and
asset-liabilities of a particular period and
helps the management and investors to
be provided with necessary information
and statements.

Page 4 Grade 10 | Semester 1 | Quarter 3 | Business Accounting Good Luck !


Lesson 3: GAAP
The Generally Accepted Accounting Principles
➔ According to De Guzman, 2018, GAAP is a
framework and guidelines of the
accounting profession. Its purpose is to
standard accounting concepts, principles
and procedures.
11 PRINCIPLES
01. Business Entity
★ A business is considered a separate
entity from the owner(s) and
should be treated separately.
02. Going Concern
★ It assumes that an entity will
continue to operate independently.
03. Monetary Unit
★ The business financial transactions
recorded and reported should be in
the monetary unit, such as
Philippine peso, US dollar, Canadian
dollar, etc. Thus, any non-financial
or non-monetary information that
cannot be measured in a monetary
unit is not recorded in the
accounting books, but instead, a
memorandum will be used.
04. Historical Cost
★ All business resources acquired
should be valued and recorded
based on the actual cash
equivalent or original cost of
acquisition, not the prevailing
market value or future value.
05. Matching Concept
★ This principle requires that revenue
recorded, in a given accounting
period, should be an equivalent
expense recorded, in order to show
the true profit of the business.
Page 5 Grade 10 | Semester 1 | Quarter 3 | Business Accounting
06. Accounting Period
★ This principle entails a business to
complete the whole accounting
process over a specific time period.
07. Conservatism
★ The principle of conservatism gives
guidance on how to record
uncertain events and estimates.
The principle of conservatism
states that one should always
consider any error on the most
conservative side of any
transaction.
08. Consistency
★ This principle states that
companies should use the same
accounting treatment for similar
events and transactions overtime.
09. Materiality Concept
★ This materiality concept, also called
the materiality constraint, states
that financial information is
material to the financial statements
if it would change the opinion or
view of a reasonable person.
10. Objectivity
★ This principle states that
accounting information and
financial reporting should be
independent and supported with
unbiased evidence. This means
that accounting information must
be based on research and facts,
not merely a preparer's opinion.
11. Revenue Recognition Principle
★ This states that revenue should be
recognized and recorded when it is
realized or realizable and when it is
earned.
Good Luck !