Chaper 1 Intro - Apontamentos 1 PDF

Preview

Summary

it is a lecture notes hope it can help...

Description

ACCOUNTING 1 (LESSON 1) CHAPTER 1 ACCOUNTING = Information System - Provide Information for business decision

BUSINESS is an organization where materials and inputs are assembled in process to provide goods or services Basic objective: MAXIMAZATION OF PROFIT Types: Service (SPA, HOTEL, BANK) – provide service

Merchandising (TRADING “GOODS”) – buy and sell

Manufacturing (FURNITURE SHOP) – converting raw materials to finish goods

Typical organization chart Owners – stockholders, they elect the BOARD OF DIRECTORS – 1. Set the direction of the organization 2. They are in and set the salaries of these officers 3. They are the one who declares dividends (return from investment)

Organization chart vary from one corporation to another corporation SOLE SINGLE PROPRIOTORESHIP – owned by one person PARTNERSHIP – two persons ( all must decide) -

General Partnership – creditor would go after the liabilty Limited Partnership – 1 general partner and 1 limited partner

CORPORATION – there is also corporataion who owns by one person, four to five persons CHARACTERISTICS CHARACTERISTICS BUSINESS ENTITY LEGAL ENTITY LIMITED LIABILITY UNLIMITED LIFE BUSINESS TAXED ONE OWNER ALLOWED

SOLE PROPRIOTORESHIP YES NO NO NO NO YES

PARTNERSHIP YES YES* NO NO NO* NO

Entitiy concept – business is separate from the owners ( ex: family expense is separate from business expens)

Legal Entity – Business and owners are one in terms of liability  Sole Propriatoreship - your business is as if it is you in terms of it’s liability ( Personal Asset – under the sole pro  *Partnership / Corporation – (Article 1768 of the civil code of the Philippines) it has juridicial personality separ owners, it has different legal personality

Limited Liability  Sole Propriotoreship ( creditors could go after the personal assets in terms of liability )

 Partnership

Business Taxed – Business is taxed like corporation ( the partnership is taxable)  Sole Propriator – if you have business you pay for the tax as the owner ( tax like corporation ) ( 0 – 30%)  Income corporation is subjected to tax ( 20 – 25% depends on the profit )  Partnership - the share of the partners are taxable Partnership in exercise with profession – is not taxable ( owner is taxable ) Partnership for commercial services are taxable like corporation ( partnership is taxalble )  Corporation – double taxation Dividends – subjected to another tax (10%)

The relationship of Accounting to Bsuiness ( ps: see the chart in the book...