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Accounting Lesson 2

This document covers the topics in Week 002 which includes different types of business organizations categorized by ownership (sole proprietorship, partnership, corporation) and by nature of activity (service, merchandising, manufacturing). It also defines three categories of business activities: operating activities involving generation of revenue and expenses; investing activities related to buying/selling long-term assets; and financing activities concerning raising funds from investors/creditors. The learning objectives are to define and differentiate these business organizations and activities.

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peter banjao
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
41 views

Accounting Lesson 2

This document covers the topics in Week 002 which includes different types of business organizations categorized by ownership (sole proprietorship, partnership, corporation) and by nature of activity (service, merchandising, manufacturing). It also defines three categories of business activities: operating activities involving generation of revenue and expenses; investing activities related to buying/selling long-term assets; and financing activities concerning raising funds from investors/creditors. The learning objectives are to define and differentiate these business organizations and activities.

Uploaded by

peter banjao
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Week 002

Business Organizations
and Activities
Week 002: Business Organizations and Activities

Module Coverage
Business Organizations as To Ownership
Sole Proprietorship
Partnership
Corporation
Business Organizations as To Nature of Activity
Service Concern
Merchandising Concern
Manufacturing Concern
Different Categories of Business Activities
Operating Activities https://www.google.com.ph/search?q=business+organ
izations+and+activitiesimages+and+photos

Investing Activities Retrieved: August 12, 2017

Financing Activities
Week 002: Business Organizations and Activities

Learning Objectives

At the end of the module, you are expected to be able to

•Enumerate, define, and differentiate the different


business organizations as to ownership; as to nature of
business activity

•Enumerate, define, and cite examples of different


business activities
Week 002: Business Organizations and Activities

Types of Business Organizations

According to Ownership
• Sole Proprietorship- owned by one person.
• Partnership- consists of two or more individuals
called partners.
• Corporation- consists of at least five persons to
incorporate; created by operation of law.

https://www.google.com.ph/search?q=+business+org
anizations+images+and+photos
Retrieved: August 12, 2017
Week 002: Business Organizations and Activities

Comparison of Business Organizations


Sole
Proprietorship Partnership Corporation
One owner, Two or more
called owners, called Many (at least five) owners, called
Ownership proprietor partners shareholders

Limited, depends
Organization's Limited, on the owner's Indefinite life ( in the Philippines, 50
life span depends on the decision or death years renewable
owner's
decision or
death
Owners'
personal Owner
liability for the personally Partners
business liable personally liable Shareholders are not personally liable
obligations or
debts
Organization's
accounting Separate from Separate from the
status the proprietor partners Separate from the corporation

https://www.google.com.ph/search?q=+business+o
rganizations+images+and+photos
Retrieved: August 12, 2017
Week 002: Business Organizations and Activities

Types of Business Organizations (continued)

According to the Nature of Activity


• Service concern- rendering services to clients as the
source of income
• Merchandising – buying goods and selling the same
as is.
• Manufacturing Concern – producing finished goods
to be sold in the market https://www.google.com.ph/search?q=merch
andising+and+manufacturing++images+and+
photos
Retrieved: August 12, 2017
Week 002: Business Organizations and Activities

Categories of Business Activities

Operating Activities - generation of revenues and incurrence of


expenses in the company’s main line of business.
Examples:
Collections from customers
Interest received on Notes Receivable
Dividends received on investments in stocks
Payments to suppliers
Payments to employees
https://www.google.com.ph/search?q=op
Payments for interest erating+activitiess+images+and+photos
Retrieved: August 12, 2017

Payments for income taxes


Week 002: Business Organizations and Activities

Categories of Business Activities (continued)


Investing Activities. Related to buying and selling of the long-
term assets (plant, property, and equipment, stocks, bonds) for
business use.
Examples :
Sale of plant assets
Sale of investments that are not cash equivalent
Receipts on loans receivable
https://www.google.com.ph/search?q=investing
Acquisition of plant assets +activitiess+images+and+photos
Retrieved: August 12, 2017
Purchase of investments that are not cash equivalents
Making loans
Week 002: Business Organizations and Activities

Categories of Business Activities (continued)


Financing activities. Raising funds from prospective investors
and creditors needed by the firm to start or to sustain the
business.
Examples :
Issuance of stocks
Selling treasury stocks
Borrowing funds
Payment of dividends
https://www.google.com.ph/search?q=financing+
Purchase of treasury stocks activitiess+images+and+photos
Retrieved: August 12, 2017

Payment of principal amount of long-term debts


Thank you very
much and
God bless you all…

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