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    Edexcel Unit 1

    Uploaded by

    Mariyam Ifham
    accounting edexcel unit 1

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Edexcel Unit 1

    Uploaded by

    Mariyam Ifham
    16 views3 pages
    accounting edexcel unit 1

    Original Title

    edexcel unit 1

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    © © All Rights Reserved

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    PDF, TXT or read online from Scribd

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    accounting edexcel unit 1

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    16 views3 pages

    Edexcel Unit 1

    Uploaded by

    Mariyam Ifham
    accounting edexcel unit 1

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    UNIT 01 : THE ACCOUNTING ENVIRONMENT MARYAM IFHAM

    TYPES OF BUSINESS ORGANIZATION

    Who is a sole trader?

    - An individual who owns his or her business (single owner)


    - Easy to startup
    - Entire responsibility

    Advantages Disadvantages

    Easy to start up Hard to raise capital

    Owner keeps all the profit Unlimited liability

    Complete control Lack appropriate skills

    Accounts don't have to be No continuity


    published

    What is a partnership?
    - Its an agreement between 2 - 20 members
    - Deed of partnership is followed
    - Must obey the partnership act

    What is deed of partnership?


    It's a formal agreement among partners to startup a partnership that
    contains the profit and loss ratios , individual capital invested ,
    salaries , interest and drawings related details .

    Advantages Disadvantages

    More capital Unlimited liability

    Loss can be shared Profit must be shared

    Collective decisions and skills Death of 1 partner will dissolve the


    agreement

    Financial report not published Conflicts among partners


    What is limited partnership ?
    A partnership that the partners are only limited to the amount invested .

    Partnership → limited : there must be 1 partner who is unlimited others are limited

    → unlimited : unlimited liability to all partners

    Organization can be classified into :

    1 . private sector →
    ● owned by private individuals or group of people
    ● Can be incorporated
    ● Separate legal status
    ● Requires auditors
    ● Limited liability

    2 . public sector →
    ● Owned by the government
    ● Not for profit (social welfare )
    ● Financed by taxes
    Who is a stakeholder?
    A person or business who has an interest upon the business and is
    affected by the business activities

    Businesses prepare 02 main financial statements they are ;


    1 . income statement → shows the profit & losses
    2 . statement of financial position → shows the liquidity of the business

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