FORMS OF BUSINESS 

ORGANISATION

There are three main forms of business organisation;

(a)     single or sole proprietorship:

                                             The simplest form of business organisation  ''to organise and operate''  is a single or sole proprietorship. This is the most common form of ownership and is found in business such as small retail shops, service stations etc.The owner is the only one in control and makes all management decisions.

(b)    partnership:

                       In a partnership , ownership is divided between two or more persons who agree to share their property and skills to start and operate a business. Like the single proprietorship,a partnership business is simple to organise.

(c)    joint stock company:  

                               A joint stock company is formed under the companies ordinance,1984 and  has the legal right to act as a person. It may be owned by many people.A company has its own mane, in which it can buy , own, and sell property; make contracts; borrow money; and take court action. The persons who have made investment in the company are known as shareholder.

2.       GOODS OR  MARCHANDISE

                      In accounting the word ''Goods'' has a special meaning.It refers to something which has been purchased by a trader for resale purposes or anything which has been manufactured  for selling purposes.

For example,if  trader purchases furniture for use in the  business , it will not be regarded as ''goods'' , but if it is purchased for resale, it will vi regarded as ''good'',The same article may be ''goods'' for one trader but may not be so to another trader.For example, furniture  is not ''goods'' for a book seller; but it will beregarded as ''goods'' to a furniture-dealer.

         Thus,    cloth will be ''goods'' to a cloth       dealer

                    Watches will be ''goods'' to a watch dealer 

                    Books will be ''goods'' to a book- seller

                   Stationery will be ''goods'' to a stationery dealer.

                  But watches, books or stationery will be considered as ''goods'' to a cloth dealer.                              

OBJECTIVES OF ACCOUNTING

• Financial information is necessary in order to run a business  in an efficient manner. Reliable information will be available only through keeping proper books  of accounts.
• Proper accounting is essential, if money is to be borrowed  for the purpose of business.The lender will only agree to lend money when he is satisfied as to the solvency of the borrower. Information available from books of accounts is the means of measuring such solvency.
  
• Cash in hand can be verified and any defalcation can be detected, if proper books of accounts are maintained.
• Payment of sales tax and  income tax is only possible if books of accounts are maintained.
• In case of any dispute, books of account can be produced in the court of law as a documentary evidence.
• Govt. fixes up fair prices, formulates industrial policy, prepares economic plans, decides import-export quotas and does many other function on the basis of accounting information available from books of acounts.

IMPORTANCE OF ACCOUNTING

TERMS AND CONCEPTS

• BUSINESS ENTITY:
  

                                        Profit making organization are known as business.There are three  main types of business; those selling services; those selling goods; those manufactring   goods. 

A business entity is an economic unit which enters into business transaction that must be recorded, summarised  and reported. The entity is regarded as separate its owner or owners; the entity owns its own property and has its own debts. The purpose of accounting is to provide useful information about an organization to people who need such information but not about the personal affairs of the owner or owners.          

NEED AND IMPORTANCE OF

 ACCOUNTING:

We live in a world where people need things from the day they are born to the day that they die.Some of these 'needs' are physical needs, a need for goods of various sorts,food,clothing,shelter, and so on. Some of them are emotional 'wants' a need for education,entertainment, or recreation.

 In satisfying such needs business man perform usefull services to their fellow humans.

In return they expected to earn a reasonable reward for their efforts in the form of profits.

A proper and fair planning of expenditure helps us to ensure proper used of our income. Of course it true that the quantitative of goods our money can not be increased by making aproper planning . But certainly we can ensure most economic use of goods or money at our disposal.  

Most of us do maintain some kind of written record of our income and expenditure. The idea behind maintaining such record is to know that correct position regarding income and expenditure.

The need for keeping a record of income and expenditure in a clear and systematic manner has given rise to the subject of 'book -keeping'.

Liabilities

Liabilities mean the total amount which a business is legally bound to pay to the outsiders, e.g. creditors, Bills payable,  Account payable, bank loan etc.

Definition of Liability A company,s legal debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits including money; goods or services.

FORMS OF BUSINESS ORGANISATION

there are three main forms of business organisation;

(a)   single or sole proprietorship:

(B)  partnership:

(c)   joint stock company:

Financial Accounting

Financial Accounting

The main purpose of financial accounting is to ascertain the true result (profit or loss) of the business operations during a particular period of time and state the financial position of the business on a particular point of time. financial accounting produces general purpose reports for use by the great variety of people who are interested in the organisation but who are not actively engaed in its day-to-day operation.

Branches of accounting

Branches of accounting

In order to meet the ever increasing demands made on accounting by different interent interested parties (such as owners, mangement, creditors ,taxation authorities etc.) the various branches of accounting have come into existense:

cost accounting

cost accounting:

The main object of cost accounting is to determine the cost of goods manufactured or produced by the business. It also helps the management of the business in controlling the costs by indicating avoidable losses and wastes.

Acounting A business language

Acounting A business language 

Acounting is a language, a system that communicates information. It is referred to as the language       of the businsess, although it is just as important in the operation of government agencies, clubs, colleges and other kinds of organisations.

Advance Accounting

Accounting(Introduction)

We live in a world where people need things from the day they are born to the day that they die.Some of these 'needs' are physical needs, a need for goods of various sorts, clothing, shelter, and so on.Some of them are emotional 'wants', a need for education, entertainment, or recreation. In satisfying such needs businessmen perforn useful services to their fellow humans. In return they expect to earn a reasonable reward for their efforts in the form of porfits.