Definitions of Accounting

Accounting is a service activity.

Accounting is an information system that measures,
processes and communicates financial information
about an economic entity.
Accounting is the art of recording, classifying and
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.
 Types of Business
Type Activity Structure Examples
Service Selling peoples time Hiring skilled staff -Software development
and selling their -Accounting
time. -Legal Services

Trader Buying and Selling Buying a range of raw -Wholesaler

materials and
Products manufactured goods and
-Retailer
consolidating them,
making them available for
sale in locations near to
their customers or online
for delivery.
Manufacturer Designing products, Taking raw materials -Vehicle Assembly
aggregating and using equipment -Construction
components and and staff to convert -Engineering
assembling finished them into finished -Electricity
products. goods. -Food and Drink
-Chemicals
-Media
Types of Business
Types Activity Structure Examples
Raw materials Growing or extracting Buying blocks of land -Farming
raw materials and using them to -Mining
provide raw materials -Oil
Infrastructure Selling the utilization Buying and operating -Transport (airport
of infrastructure assets (typically large operator, airlines, trains,
assets); selling ferries, buses)
occupancy often in -Hotels
combination with -Telecoms
-Sports Facilities
services. -Property management
Financial Receiving deposits, Accepting cash from -Bank
depositors and paying
lending and them interest; charging
-Investment House
investing money fees.
Insurance Pooling premiums Collecting cash from Insurance
many customers;
of many to meet investing the money to
claims of a few pay the losses
experienced by a few
customers.
Forms of Business Organizations
1. Sole Proprietorship
- has a single owner called the proprietor who
generally is also the manager.
2. Partnership
- owned and operated by two or more persons who bind
themselves to contribute money, property or industry to a
common fund, with the intention of dividing the profits
among themselves.
Forms of Business Organizations
3. Corporation
- a business owned by its stockholders. An
artificial being created by operation of law, having
the rights of succession and the powers, attributes
and properties expressly authorized by law or
incident to its existence.
Activities in Business Organizations
Financing Activities
Investing Activities
Operating Activities