Forms of Organization - Basic Accounting

Accounting

1. Branches of Accounting Ms. Ericah Ramirez ABM 12

2. FINANCIAL ACCOUNTING Is the Broadest branch and is focused on the needs of external users. the primary concerned with the recognition, measurement and communication of economic activities.

3. MANAGERIAL ACCOUNTING emphasizes the preparation and analysis of accounting information within the organization. Involves financial analysis, budgeting and forecasting, cost analysis, evaluation of business decisions and similar areas.

4. GOVERNMENT ACCOUNTING deals with how the funds of the government are recorded and reported. about the government in aggregate and in detail reflecting transactions and other economic events involving the receipt, spending transfer, usability and disposition of assets and liabilities.

5. COST ACCOUNTING Subsets of management accounting recording, presentation, and analysis of manufacturing costs.

6. TAX ACCOUNTING helps clients follow rules set by tax authorities includes tax preparations of tax returns

7. AUDITING There are two types of Auditing External - examination of FS by independent CPAs Internal - deals with determining the operational efficiency of the company

8. ACCOUNTING EDUCATION deals with developing future accountants by creating relevant accounting curriculum. Accounting professionals can become faculty members of educational institutions

9. ACCOUNTING RESEARCH focuses on the search for new knowledge on the effects of economic events on the process of summarizing. analyzing, verifying and reporting standardized financial information and on the effects of reported information on economic events

10. Graded Recitation Preparation of general purpose financial statement. 2. Evaluation of the performance of a sales department. 3. Develop standards to address a new business set up. 4. Review tax compliance of the business. 5. Evaluate whether a branch of the business complies with the collection and deposit policy of the company 6. Review whether the FS are presented fairly and in compliance with accounting standards. 7. Report on the spending of government funds. 8. Report total cost of materials and labor used in the production. 9. Conducting lectures on accounting topics. FINANCIALS MANAGERIAL A.RESEARCH TAX ACCOUNTING . INTERNAL AUDITING EXTERNAL AUDITING GOVERNMENT ACCOUNTING COST ACCT ACCOUNTING EDUCATION

11. VENN DIAGRAM

12. Users of Accounting Information

13. Managerial accounting

14. What they need is the INFORMATIONS about the BUSINESS in TOTALITY? FINANCIAL accounting

15. Forms of Business Organizations

16. Advantages Disadvantages

17. PARTICULARS SOLE PROPRIETORSHIP PARTNERSHIP CORPORATIONS COOPERATIVES Number of Possible Owners 1 2 or more At least 5 15 or more Management (who manage the business) Owner but he may hire Managers Partners but they may hire Managers Board of Directors or Operating Managers Board of Directors or Operating Managers Termination of the Business Death of the Owner Death of the Partner or Withdrawal of the Partner As stated, in the Articles of Incorporation, no tot exceed 50 years As stated, in the Articles of Incorporation, no tot exceed 50 years Government Agency assigned primarily to regulate In limited capacity, DTI In limited capacity, DTI SEC CDA Transfer of Ownership Sell of the business ( it’s new entity under the new owner’s name) Sell of the business or interest of a partner (consent of other partner is necessary Sell stocks Cannot transfer nor sell his membership Liability of Owners Unlimited Liability Generally unlimited Limited to the stock investments of the shareholder Limited to capital contribution of the member

18. Types of Business According to Activity

19. THREE MAJOR TYPES OF BUSINESS

20. service companies

21. merchandising companies

22. mANUFACTURING companies

23. Can the three types go together? A music production and recording company is handling singers and talents. These singers and talents perform at concerts produced by the company. The firm has a record bar where they sell CDs of different artist. Lastly, the company is also producing CD albums of the latest songs of the singers. Now, identify the activities per above examples: SERVICES MERCHANDISING MANUFACTURING Concert Performance Record Bar Production of CD Album

24. Can the three types work as a system? A manufacturer of essential oils produces their products and sells them to different groceries. These groceries then sells them to customers. A massage spa will then purchase these essentials oils for use in the massage therapy services. Now, identify the activities per above examples: SERVICES MERCHANDISING MANUFACTURING Massage Spa Grocery Essential Oil Company

25. Income Measurement SERVICE MERCHANDISING / MANUFACTURING Service Revenue XXXXX Less: Operating Expenses XXXXX Net Income (Loss) XXXXX Service Revenue XXXXX Less: Cost of Goods Sold XXXXX Gross Profit XXXXX Less: Operating Expenses XXXXX Net Income (Loss) XXXXX A barber shop earned 60,000 during the month of August. Salaries paid to barbers amounted to 20,000. Utilities paid for 6,000 and rent of the space for the barber shop is 5,000. How much is the net income of the barber shop Service Revenue 60,000 Less: Operating Expenses Salaries Expense 20,000 Utilities Expense 6,000 Rent Expense 5,000 31,000 Net Income (Loss) 29,000

26. Income Measurement A grocery store earned 225,000 from selling their goods during the month of April. These goods sold were first purchased at an amount of 160,000. Salaries paid to employees is 25,000, utilities paid is 4,000 and rent of the selling area is 6,000. How much is the net income of the grocery? Service Revenue 225,000 Less: Cost of Goods Sold 160,000 Gross Profit 65,000 Less: Operating Expenses 35,000 Net Income (Loss) 30,000 A car manufacturing company sold 2 cars totaling 3,000,000 during the month of April. Car parts and materials used for these cars amounted to 600,000, labor cost paid 800,000 and other indirect cost to manufacture the cars amounted to 100,000. Salaries paid to office employees amounted to 50,000, Utilities paid is 20,000 and rent of selling area and office space is 10,000. How much is the net income of the car company? Service Revenue 3,000,000 Less: Cost of Goods Sold Materials 600,000 Labor 800,000 Overhead 100,000 1,500,000 Gross Profit 1,500,000 Less: Operating Expenses Salaries 50,000 Utilities 20,000 Rent 10,000 80,000 Net Income (Loss) 1,420,000

27. Accounting Concepts and Principles

28. Conceptual framework Accounting Principles -STANDARDS Rational Thinking Collective Reasoning Agreed by all accountants

29. Thank you very much! ABM 12