1 | ACCTG 101

REVIEW – MIDTERMS
DEFINE ACCOUNTING (according to the AICPA) as the ART

 Accounting is the art of recording, classifying, summarizing in a significant manner and in terms of money,
transactions, and events which are, in part at least, of a financial character, and interpreting the results
thereof.

WHAT ARE THE FORMS OF BUSINESS ORGANIZATIONS AND THEIR RESPECTIVE OWNERS?

1. Sole Proprietorship – Proprietor

2. Partnership – Partners
3. Cooperative – Members
4. Corporation – Share or Stockholders

NAME THE TYPES OF BUSINESS AND BRIEFLY DESCRIBE THEM.

1. Service-Oriented Business
 its product is the service rendered, skills, knowledge, or expertise
 ex: spa, law firm, accounting firm, car repair shop, barber shop

2. Merchandising or Trading Business

 it sells finished products which the business buys (no alteration).
 ex: sari-sari store, mobile phone reseller, car reseller, grocery store

3. Manufacturing Business
 it processes inputs to form finished goods which they sell later
 ex: car manufacturer, textile company, food products maker

4. Agriculture Business
 this business is those who do the actual planting of the produce, do the fishing, raise poultry or
cattle, piggery, etc. and sell whatever their produce

5. Hybrid Business
 the business which has two or more types of business
 ex: bake shop which produce their pastries (manufacturing) and sells soda or other drinks
(merchandising)

RULES OF DEBIT AND CREDIT

A. WHAT ELEMENTS ARE INCREASED ON THE DEBIT SIDE?

 ASSETS
 EXPENSES
B.