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FABM1
FABM1
Nature of Accounting
1. Accounting is a process
2. Accounting is an art
3. Accounting deals with financial information and
transactions
4. Accounting is a means and not an end.
5. Accounting is an information system.
FREQUENCY OF REPORTS
6. To acquire lands and provide housing benefits for the A BUSINESS is an organization that converts inputs or
members resources such as material, labor, and overhead into
outputs which are usually either goods or services.
7. To insure against losses of the members
3 types of business
8. To promote and advance the economic, social, and
educational status of the members. 1. Service Companies
1. It can be sue and be sued under its own name 3. Manufacturing Companies
RETAILER
The existence of Holding inventories
A merchandising company that sells goods directly to tangible products involves management and
customers or to final consumers. Goods are sold in small provides a leeway to require cost and security
quantities. merchandising
companies to make
WHOLESALER
customers notice
A merchandising company that sells goods to retailers. their products,
Goods are sold in big quantities or in volumes. thereby promoting
sales.
Operating cycle of merchandising companies
• Cash on Hand Consume less
conversion time,
• Buys goods
effort, and cost
• Stores goods as inventory
• Sells inventory
KINDS OF RETAILER
• Receives payment from customers
1. DEPARTMENT STORES – carry a wide variety of
product lines
2. SUPERMARKET – sells a variety of food and
household products
3. SPECIALTY STORES – carry a variety of models for
one kind or limited product lines. Ex. Cellphone stores
4. CONVINIENCE STORES –carry high turn-over goods, They earn revenues primarily from the sale of
24hrs a day, 7 days a week, their prices are higher than manufactured products. Their products can be sold
those of supermarkets directly to consumers, retailers, and other manufacturers.
5. SUPERSTORES – larger supermarkets and Manufacturing has its operating cycle generally has the
department stores have emerged. Ex; Puregold , S&R, longest period compared to service and merchandising.
Landmark, Savemore The cycle has additional phase which is the production of
goods.
6. FACTORY OUTLET – different manufacturers are
grouped together in one factory outlet mall. The outlets Operating cycle of manufacturing companies
are located in places far from the cities and offers a
• Cash on hand
variety of choices.
• Pays for inputs (material, labor, overhead)
7. DIRECT SELLING – one-on-one selling. One seller
approaches a buyer . Many times the buyers are friends • Converts input into finished goods
or relatives of the seller.
• Stores finished goods as inventory
• Sells inventory
MANUFACTURING COMPANIES
• Receives payment from customers
Manufacturing companies or simply manufacturers , are
relatively complicated organizations than service and
merchandising companies.
They creates their own products. They use raw materials,
components, or parts which are processed using
machines, computers, and labor to produce finished
goods.
Manufacturers typically employ large-scale production
which is done in manufacturing plants.
Advantages and disadvantages of manufacturing
companies
ADVANTAGE DISADVANTAGE
Managing inventory