By Nida Fatima

• Any legal activity which is undertaken

• For the purpose of earning profit

• For Example , An example of business

is farming. An example of business is a
house sale.
There are three classes of business

• Trading business

• Manufacturing business

• Serviving business
• Goods are purchased and sold
• Without any modification
• For example , cloth retail shop , books
retail shop, fruit shops toys shop etc
• Raw material or semi finished goods are
• Bought and sold
• After some modification
• For example Automotive companies, such as
Ford and GM, are classic examples of
manufacturing businesses.
• Intengible items like services are
• Purchased and sold
• For Example Banks , insurance
companies
• Consultancy Business etc
• An exchange of goods and services
• Between two or more persons
• Or institutes
• For example
• A good example of an internal
transaction is interdepartmental
exchanges of assets. ... Buying goods
from a third party vendor is a good
example of an external transaction.
• Business organization has three
forms

• Sole proprietorship

• Partnership

• Joint stock company

Natalie Behring, www.nataliebehring.com

Business Entity

• An economic uni
• Enters into business transaction
• Must be summarized recorded and
reported
• Entity is regarded
• As separate from its owner or owners,
• And has its own debts
• For Example.
• A business issues a $1,000 distribution
to its sole shareholder. ...
• The owner of a business loans $100,000
to his company.
Managerial Accounting

The object of this accounting is to

communicate the relevant information
Periodically to the management of the
business to enable it
Examples of Managerial Accounting
• Job order costing.
• Process costing.
• Absorption costing vs. variable costing.
Managerial Accounting