Session 1
☆Types of business entity
A business can be organized in one of the veral ways:
●Sole trader – a business owned and operated by one person.
The simple form of business is the sole trader. This is owned and managed by one person, although there might be any number of employees. A sole trader is fully personally liable for any loss that the business might make.
●Partnership – a business owned and operated by two or more people.
A partnership is a business owned jointly by a number of partners. The partners are jointly and verely liable for any loss that the business might make.
（Traditionally the big accounting firms have been partnerships, although some are converting their status to limited liability companies.）
●Limited Liability Company – a business owned by many people and operated by many （ though not necessarily the same） people. Companies are owned by shareholders. Shareholders are also known as members. As a group, they elect the directors who run the business. Companies are always limited companies.
In summary, types of business entity should be differentiated in Ownership; Operation right and Liability for the business to undertake.
For all three types of entity, the money put up by the individual, the partners or the shareholders, is referred to as the business capital. In the ca of a company, this capital is divided into shares.
☆Business Transactions: Main types of business transactions for a business include:
●Purcha of inventory for resale
●Sales of goods
●Purcha of non-current asts
●Payment of expens
●Introduction of new capital to the business
●Withdrawal of funds from the business by the owner
☆Cash and credit transactions:
Cash transactions: the buyer pays for the item immediately or possibly in advance.
Credit transactions: the buyer does not have to pay for the item on receipt, but is allowed some time （ a credit period） before having to make the payment.
☆Definition of accounting
小学快乐英语Recording : transactions must be recorded as they occur in order to provide up-to-date information for management.
Summarizing: the transactions for a period are summarized in order to provide information about the company to interested parties.
☆qianxingTypes of accounting
Financial accounting vs management accounting
accu的用法 | Financial accounting | Cost and management accounting |
Purpo英语四级报名登录入口 | Record financial transactions | Information of cost of operations |
Legal requirement | Limited liability company, by law, prepare financial accounts | No legal requirement to prepare management accounts |
Main ur | External | Internal |
Time | At the end of period | regularly |
Information | historic | historic and forecast |
| | |
☆Urs of financial statements
exhausted
Accounting reports urs include:
●Management: Need information about the company’s financial situation as it is currently and it is expected to be in the future. This is to 工作狂英文enable them to managedimension
the business efficiently and to make effective decisions.
●www x7x8 inInvestors: The providers of risk, capital and their advirs are concerned with the risk inherent in, and return provided by, their investments. They need information to help them determine whether they should buy, hold or ll.
●Trade payables/ Suppliers: Suppliers and other trade payables. Suppliers and other trade payables are interested in information that enables them to determine whether amounts owing to them will be paid when due. Trade payables are likely to be interested in an enterpri over a shorter period than lenders unless they are dependent upon the continuance of an enterpri as a major customer.
●Shareholders: Shareholders are also interested in market value of shares as well as information which enables them to asss the ability of the enterpri to pay dividends.待摊费用属于
●Lenders: Lenders are interested in information that enables them to determine whether their loans, and the interest attaching to them, will be paid when due.
●Customers: Customers have an interest in information about the continuance of an enterpri, especially when they have a long term involvement with or are dependent on, the enterpri.
●Government and their agencies: Governments are their agencies are interested in th
e allocation of resources and, therefore, the activities of enterpris. They also require information in order to regulate德文字母 the activities of enterpris, determine taxation policies and as the basis for national income and similar statistics.
