Difference of bookkeeping from accounting

Bookkeeping is Procedural and is largely concerned with the development and

maintenance of accounting records, it is the How of accounting
Accounting is Conceptual and is concerned with the Why reason or justification of
any action adopted.

Forms of organization
1. Single or Sole Proprietorship- is a business organized and owned by only one
person who usually acts as manager.

2. Partnership- is a business organization owned by two or more individuals who

contribute money, property, industry and talent into a consumer fund and
then divide the profits among themselves
The individuals are called Partners.

Managerial functions needed operate the business

A. Production manager- will oversee the manufacturing of the product
B. Marketing manager- will be the responsible in promoting and selling the
product
C. Finance manager- will take change of the companys financial resources
(where to invert borrow and how to use the funds or resources of the co.
D. Human resources manager- takes care of selecting, hiring and training the
employees and workers

3. Corporation- is a business organized as a separate legal entity(from the

owners)
Cooperation comes from the Latin word CORPUS means body
-An organization composed of five (5) or more persons not exceeding fifteen
(15) registered with the securities and exchange commission (SEC) having
the rights, powers and attributes of a person (as a legal entity it can enter
into contracts, own property and issue stocks)
-Investors are called Stockholders- where rights over the business are
expressed in the member of shares bought and are evidenced by certificates
of stocks.
-Corporation cannot be managed by the stockholders not like sole
proprietorship, the owner is the manager, partnership managed by the
partners.

Types of business operations

1. Service business- is the simplest type of business which performs service,
for a fee, to a client or customers
 2. Merchandising business- is one which buys goods or merchandize that are
physically ready for sale and sells these products at higher prices
3. Manufacturing business- makes its product first and after changing the
form sells the product to customer.
The cost of the product manufactured of:
a. Cost of buying the raw material
b. Cost of direct label labor or compensation paid to worker who
process the raw material
c. Cost of the manufacturing overhead needed to process the product
Why is accounting also called the language of business?
Accounting is the language of business because it communicates vital
information to statement users for decision purposes.