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Lesson title: References

Lesson Objectives:
At the end of this module, I should be able to:
(State your objective)

A. LESSON PREVIEW/REVIEW
1) Introduction

B. MAIN LESSON
1.) Types of Business Organizations

Different types of organization is 

1.Sole Proprietorship

A Sole Proprietorship consists of one individual doing business. sole proprietorship are the most
numerous form of business organization.however they account for little in the way of aggregate business
receipts.

2.Partenership

A partnership consists of two or more individuals in business together. partnerships may be as small as
mom and pop type operations or  as large as some of the big legal deal or accounting firms that may have
dozen of partners

3.Corporation

Corporations are probably the dominant form business organization. although fewer in number
corporations account for the lions share of aggregate business receipts in our economy.

2.) Accounting Fundamental Concepts and Basic Principles

the fundamental concepts has a different types Elements of Accounting the Element of Accounting
pertain to assets,liabilities and capital . Accounting equation   the accounting equation shows the
relationship between the accounting elements . Double Entry Accounting System the double entry
accounting system recognize a two hold effect in every transaction.business transaction are recorded at
least two accounts.The accounting cycle 

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the accounting cycle is sequence of steps in the collection,processing and presentation of accounting
information. in the Basic Principles there are numbers that have been developed through the common
usage. they form the basis upon which the complete suite of accounting standards have been built.
Revenue Principle also known as the revenue principle,state the revenue is earned when the sales is
made which is typically when goods service are provided.Expense Principle States the expense occurs
when the business uses good or receives services.Cost Principle States the amounts in your accounting
system should be quantified or measured by using historical cost. Objectivity Princple states the
accounting measurements and accounting reports should use objective,factual and verifiable data.

3,) Financial Statements

the financial statements are written records that convey the business activities and financial performance
of the company. The balance sheet provides an overview of assets,liabilities and stockholders equity as a
snapshot in time.the income statement primarily focuses on a company’s revenues and expenses during
a particular period.Once expenses are subtracted from revenues the statement produces a company’s
profit figure called net income. the cash flow statement measures how well a company generates cash to
pay its debt obligation fund is operating expenses and fund investment.

4,Elements of Accounting

The elements of accounting no business can run without an accounts department and hence the duty of
accounting department is to present a financial picture to the business there are 5 elements of
accounting.

1.Assets

Assets are the resources which the businesses use to conduct their activities. an item becomes an asset
when you own it or have the right to use it.

2,Liabilities

Liabilities are a group of items which are obligations to the business. they arise when you make a
purchase or taken a loan for the business.to settle these liabilities you will need to settle assets.

3.Expenses

Expenses are unavoidable events in the business to conduct business operations. for a period of time
expenses reduce the assets and increase liabilities.

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4.Revenue

Revenue is what comes from the company sells their products or deliver their services. revenue is the
income of the business thus resulting in increasing of assets and decreasing of liabilities.

5.Owner’s Equity

Owner’s Equity is the capital by the owner on the business to conduct his business activities. owner’s
equity includes all the way through wich resources make the business function properly.

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