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Acc406 lecture note 1

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LECTURE 1 INTRODUCTION TO ACCOUNTING WEEK 1 TOPIC OUTCOME At the end of the session, students should be able to ✔ Define accounting. ✔ Differentiate between accounting and bookkeeping ✔ Understand the functions of accounting ✔ Know the main user groups of financial statements ✔ Differentiate the various forms of businesses (sole trader of merchandising and service enterprise, partnership and private & public companies) Types of Business SERVICE BUSINESS MERCHANDISING (TRADING) BUSINESS MANUFACTURING BUSINESS Forms of Business The different types of businesses (services, trading or manufacturing) can be in the form of : 1) Sole proprietorship 2) Partnership 3) Companies Sole proprietorship/sole trader •Characteristics of sole trader: 1) One owner 2) Must be Malaysian or permanent resident 3) Can use personal names or trade names (cannot use ‘national’, ‘chartered’ or ‘di-Raja’ or name of other person) 4) Owner personally responsible for its debts and liability unlimited 5) Owner reports all income and expenses on the owner’s personal tax return 6) Business terminates upon owner’s death Partnership 1) Two to 20 partners. 2) Must have at least one general partner who assumes unlimited liability and limited partner whose liability is limited to the amount contributed. (Sleeping/dormant partners and active partners) 3) Must be Malaysian or permanent resident 4) Can use personal names or trade names (cannot use ‘national’, ‘ ...
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Anonymous
Very useful material for studying!

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