ABM 002/Fundamentals of Accounting and Business

PHINMA-University of Pangasinan Management 1

Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

Enumerating the Forms of Business

Organizations References
Ballada, Win. Basic Accounting. 2016
Edition
Learning Objectives Florendo, Joselito. Funadmentals of
At the end of the lesson, you should be able to: Accountancy, Business, and
1. Differentiate the forms of business organizations; and Management 1. 2016
2. Make a list of existing business entities in their community and Valencia, Edwin. Basic Accounting.
identify the form of business organization. 2004

Review
Before we start our new lesson, let us first have a
review of what we had last meeting. Let’s see what you
remember!

TRUE or FALSE. Write True if the statement about accounting information user is correct, false if not.
________1. Accounting information is used only by external users with a financial interest in a business
enterprise.

________2. The only users of financial information are the owners of a business.

________3. Internal users of accounting information include a company's shareholders.

________4. External users of accounting information are managers who plan, organize, and run a business.

________5. External users of financial accounting information are the same users of management
accounting information.

Key Answer : 1. False 2. False 3. True 4. False 5. False

Well- done! Now you are ready for the next topic!

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 ABM 002/Fundamentals of Accounting and Business
PHINMA-University of Pangasinan Management 1
Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

Pre-Printed Concept Notes

FORMS OF BUSINESS ORGANIZATION

Sole proprietorship
 Also referred to as “single proprietorship,” a sole proprietorship is the simplest form of
business and the easiest to register, through the Bureau of Trade Regulation and
Consumer Protection (BTRCP) of the Department of Trade and Industry (DTI). It is
owned by an individual who has full control/authority of its own and owns all the assets,
as well as personally answers all liabilities or losses. The fact that it is run by the
individual means that it is highly flexible and the owner retains absolute control over it.

Partnership

 A partnership consists of two or more persons who bind themselves to contribute

money or industry to a common fund, with the intention of dividing the profits among
themselves. The most common example of partnerships are professional partnerships,
like in the case of law firms and accounting firms. Just like a corporation, it is registered
with the Securities and Exchange Commission (SEC).

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 ABM 002/Fundamentals of Accounting and Business
PHINMA-University of Pangasinan Management 1
Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

Corporation

 A corporation is a juridical entity established under the Corporation Code and registered
with the SEC. It must be created by or composed of at least 5 natural persons (up to a
maximum of 15), technically called “incorporators.” Juridical persons, like other
corporations or partnerships, cannot be incorporators, although they may subsequently
purchase shares and become corporate shareholders/stockholders.

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 ABM 002/Fundamentals of Accounting and Business
PHINMA-University of Pangasinan Management 1
Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

Developmental Activity

Alright , now that you’re done copying the concept notes, listen to the teacher
attentively and try to answer the following during the discussion. Make sure not to make
some noise, okay!

Multiple Choice. Encircle the letter of the correct answer.

1. The simplest form of business ownership is a _______________.

A. proprietorship
B. partnership
C. corporation
D. Incorporation

2. Which of the following is an advantage of a sole proprietorship?

A. ease of starting a business
B. being your own boss
C. Pride of ownership
D. All of the above.

3. It is a business with two or more owners.

A. Corporation
B. Conglomerate
C. Partnership
D. Public corporation

4. Which of the following is probably the most important reason for incorporating?
A. Limited liability of shareholders
B. More money for investment
C. Increased flexibility
D. Shared management

5. It is a form of business organization that provides for the greatest

degree of continuity.
A. General partnership
B. Joint venture
C. Corporation
D. Sole proprietorship

6. The most effective form of business organization for raising

capital is the:
A. Joint venture
B. Partnership
C. Corporation

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 ABM 002/Fundamentals of Accounting and Business
PHINMA-University of Pangasinan Management 1
Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

D. Proprietorship

7. Individuals who invest in a corporation by buying stocks are:

A. Proprietors
B. Conglomerates
C. Stockholders
D. Subsidiaries

8. A business that is owned and controlled by one person is a:

A. cooperative
B. Partnership
C. Sole Proprietorship
D. Corporation

9. A sole proprietorship is a business where all of the following are true except that:
A. The owner has complete control over decision-making
B. The proprietor is liable for losses to the extent of his or her personal assets
C. Profits are only taxed once as the proprietor’s income
D. The proprietor can sell stock to increase its capital resources

10. Unlimited liability for sole proprietorship means that ____________________________.

A. they can lose everything they own if their businesses fail
B. Proprietors are liable for all the value of all the shares they own in a business
C. A partnership appears relatively more attractive
D. Sole proprietorships are less risky to operate than corporations

11. In a partnership, the owners _____________________________.

A. are sheltered somewhat from unlimited liability
B. always splits profits and losses, 50-50
C. may have access to more venture capital, but each loses some independence in decision-making
D. enjoy limited liability

12. The limited liability associated with the corporate form of ownership results from:
A. Corporations being much less likely to experience losses
B. Corporations existing as legal entities, separate and apart from their owners
C. Lower taxes on dividends
D. The many stockholders who share liability

13. All of the following are characteristics of sole proprietorships except that
A. There is a single owner
B. Profits are taxed twice
C. Liability is unlimited
D. They may have a difficult time raising funds to expand the business

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 ABM 002/Fundamentals of Accounting and Business
PHINMA-University of Pangasinan Management 1
Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

14. All of the following are characteristics of corporations except that

A. The power of corporate managers is complete and cannot be challenged by stockholders
B. Liability is limited
C. The corporation is a separate legal entity
D. The corporation may gain access to funds by issuing more stocks

15. Businesses exhibit different forms of business organizations because ___________________.

A. proprietorship and partnerships are typically more profitable than corporations
B. establishing a corporation is complicated so few proprietorships and partnerships ever try
C. common stockholders vote to have different types of business organization in different firms
D. each form has unique advantages that satisfy particular firms.

Key Answer: 1. A 2. D 3. C 4. B 5. C 6. C 7. C 8. C 9. D 10. A 11. C 12. B 13. B 14. A 15. D

Now you know the basic concepts of the topic, let’s make learning more fun, with your friends.

Guided Practice

<Triad Activity>. For this part of the lesson, in a group with three
(3) members each, discuss the following with your groupmates,
and answer what is asked below. Have fun!

1. What is Partnership?

2. What are the advantages of Corporation?

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 ABM 002/Fundamentals of Accounting and Business
PHINMA-University of Pangasinan Management 1
Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

3.What are the disadvantages of Sole Proprietorship?

Independent Practice

<Build Momentum>. kay, you did a great job in your group task. Now it’s
time to check your own understanding about the topic by answering the
following items on your own. Can you do it? Of course, you can! Remember to
work independently and never disturb your classmates. Good luck!

Directions: Write “A” on the blank if it is an advantage and “D” if it is a disadvantage.

_____1. In a partnership, may be dissolved if partner dies.

_____2. In a sole proprietorship, easy dissolution
_____3. From stockholder’s viewpoint, stockholders have limited liability in a corporation.
_____4. In a sole proprietorship, the owner has unlimited liability.
_____5. In a corporation, termination is difficult.
_____6. In a sole proprietorship, scale of business and expertise.
_____7. In a sole proprietorship, the owner receives the entire profit from the business.
_____8. In a corporation, there is double taxation (on profits and then on dividends.)

Answer Key: 1. A 2. A 3. A 4. D 5. D 6. A 7. A 8. D

See? I told you, you can do it! Excellent!

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 ABM 002/Fundamentals of Accounting and Business
PHINMA-University of Pangasinan Management 1
Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

Closure Activity
So how do you find the lesson today? Isn’t it interesting and exciting?

We are almost done. To sum up the lesson for today, kindly share what
have you learned from the topic by answering the question below:

1. What are the advantages of Sole Proprietorship?

Enrichment Activity

I can see that you want more. Additional task is provided below to deepen you
knowledge and understanding about the lesson today. Keep going!

Classify whether the given business belongs to Sole Proprietorship (SP), Partnership (P), and Corporation (C).

1. Fitness Instructor - ______SP_____

2. Adidas- ____C_______
3. Freelance Writer- _______SP____
4. Microsoft- ____P_______
5. Landscaper- ____SP_______
6. McDonald’s- ____P_______
7. 7-Eleven- _______C____
8. BPI- _____C______
9. BDO- _____C______
10. PLDT- _____C______

I guess this ends the lesson for today. Thank you for your cooperation and see you
again for the next topic.

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 ABM 002/Fundamentals of Accounting and Business
PHINMA-University of Pangasinan Management 1
Teacher/Facilitator Lesson Plan Grade 11
Day/Session 05

Explore Activity What are the Three Types of Business?

Sequence of Lesson Activities

Activity Time Allotment
1. Review/Lesson Preview 5 minutes
2. Copying of concept notes / Reading Materials 10 minutes
3. Developmental Activity 1 15 minutes
4. Guided Practice 15 minutes
5. Independent Practice 15 minutes
6. Closure Activity 10 minutes
(Facilitator instructs students to do the closure activity)
7. Enrichment Activity 10 minutes
(Note: Explore activity is not allotted minutes.) 80 minutes (+ 10 mins
for administrative
activities and
supplementary
instruction)

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