Estioco, Armiela Shane V.

BSTM-Year III

RESEARCH PAPER IN ACC. 082 BASIC ACCOUNTING FOR HM AND TM

INTRODUCTION

Accounting is a process of identifying, recording and communicating economic information that is useful
in making economic decisions. A business is an activity where goods or services are exchange for money.
A person who is engaged in business is called an entrepreneur or businessman.

There are types of business organizations

 sole single proprietorship

 partnership
 corporation and cooperative

This types of business organizations simply organized businesses in the Philippines. Sole single
proprietorship is the most common and simplest form of a business organization. Partnership is a
business that is owned by two or more individual who entered into a contract to carry on the business
and divide among themselves the earning therefrom. Corporation is an artificial being or judicial person,
meaning in the eyes of the law, a corporation is like a person, separate from its owners. Lastly is the
cooperative, cooperative is came from the root word “cooperate”. A cooperative is an association if
individuals who joined together to contribute capital and cooperate in order to achieve certain goals.

Here are some advantages and disadvantages of different types of business organizations.

Advantages

 Decision making is simple because you have complete control over the business
 You share the business risk and the responsibility of running the business with your partner
 Stock holder who is not member of the corporation’s board of directions is relieved from
managerial responsibilities.
 Limited liability-the members are liable for cooperative debts only up to the amount they have
invested.
Disadvantages

 You take all responsibility and rely mostly on yourself in making decisions.
 You don’t keep all the profits because you need to share them with your partners.
 Your “say” on corporate affairs depends on the numbers of shares your own.
 Compare to a corporation, it is more difficult for a cooperative to sustain growth.

Accounting fundamental concepts and basic principles

Accounting concepts and principles are a set of logical ideas and procedures that guide the
accountant in recording and communicating economic information. Accounting concepts are
principles provide reasonable assurance that information communicated to users is prepared in
a proper way.

Accounting concepts and principles are either explicit or implicit. Explicit concept is principles
are those that are specifically mentioned in the conceptual framework for financial reporting
and in the Philippines financial reporting standards. The Philippines financial reporting standards
are standards and interpretations adopted by the financial reporting standards council. Just like
the basic accounting concepts, the standards serves as guide when recording and
communicating accounting information.

Financial statements

Financial statements are the end product of the accounting process. Information from the
journal and the ledger are meaningless to most users unless they are summarized and
communicated through the financial statements. Financial statements show information or
assets. Liabilities and equity, It is also shows information on income and expenses, and
consequently, the profit or loss for the period.

Elements of accounting

Accounting is a process with the basic purpose of providing information about economic
activities intended to be useful in making economic decisions.

Identifying is one of the elements of the definition of accounting where the accountant analyzes
each business transaction and identifies whether the transaction is an accountable event or non-
accountable event. This is only because only accountable events are recorded in the book of
accountant. Non accountable events are not recorded in the book of accountants.

Types of information provided by accounting

 Quantitative information- expressed in the numbers, quantities or units.

 Qualitative information- expressed in words or descriptive form.
 Financial information- is also quantitative information because monetary amounts are
normally expressed in numbers.

BEHIND EVERY GOOD BUSINESS, IS A GREAT ACCOUNTANT! 