Forms of Business Organizations

Various Forms of Business All organizations shall follow a certain legal scheme specifying the ownership, power, personal responsibility, lifetime and financial arrangement rights and liabilities of the participants of the entity.  Four Basic Forms These are the four basic forms of business organizations that may be registered. Sole Proprietorship Partnership Corporation Cooperative Sole Proprietorship A … Read moreForms of Business Organizations

The Basic Accounting Equation

The Basic Accounting Equation The relation of assets, liabilities, and equity is shown in the following accounting equation. The accounting equation applies to all transactions and events, to all companies and organizations, and to all points in time. ASSETS = LIABILITIES + EQUITY We can break down equity to get the expanded accounting equation. ASSETS … Read moreThe Basic Accounting Equation

Elements of Financial Statements

Elements of Financial Statements Accounting shows two basic aspects of a company: what it owns and what it owes. Assets areresources a company owns or controls. The claims on a company’s assets—what it owes—areseparated into owner (equity) and nonowner (liability) claims. Together, liabilities and equityare the source of funds to acquire assets. Aside from assets, … Read moreElements of Financial Statements

Users of Accounting Information

Accounting is called the language of business because it communicates data that help people make better decisions People using accounting information are divided into two groups: external users and internal users. Financial accounting focuses on the needs of external users, and managerial accounting focuses on the needs of internal users. External Users External users of … Read moreUsers of Accounting Information