FORMS OF BUSSINESS ORGANIZATIONS,TYPES OF BUSINESS,FINACIAL STATEMENTS, COMMISSIONS

Question 1

A business is owned by one person, called the proprietor, who invests his money or capital in the business.

Answer 1

SOLE PROPRIETORSHIP

Question 2

Two or more persons own a single business. The owners of a partnership are called partners. It is created the mere agreement of the partners. From then, partners contribute resource or industry into the common fund and divide the profits among themselves based on their agreement.

Answer 2

Partnership

Question 3

It is created by at least five, but not more than fifteen persons and with the consent of the government. Corporation raise capital by issuing certificates of ownership called stocks or shares to interested persons. A person who bought these shares from the corporation is a shareholder. A shareholder is a part owner of a corporation to the extent of the number of his shares.

Answer 3

Corporation

Question 4

Is one who renders service for a fee.
The income earned by the servicing firms is usually called service revenue or service fees.

Answer 4

Service business

Question 5

Buys from suppliers and sells merchandise to customers.

Answer 5

Merchandising business

Question 6

Produces goods for sale. They buy raw materials and convert them to finished products ready for sale.

Answer 6

Manufacturing business

Question 7

A mixture of two or more types of business activities.

Answer 7

Hybrid

Question 8

Shows the income, expense and net result of operations over a period of time up to the date of reporting.

Answer 8

Statement/Statement of Comprehensive Income

Question 9

Shows the changes in the cash position: cash inflows and cash outflows of the enterprise for the period.

Answer 9

Statement/Statement of Cash Flows

Question 10

Shows a list of the resources, debts and capital of the enterprise as of date of reporting.

Answer 10

Balance Sheet/Statement of Financial Position

Question 11

Shows additional disclosures of certain information summary of the changes in the capital of the which are useful to users of the financial statements in understanding the information in the financial statements

Answer 11

Notes to the financial statements

Question 12

It is paid to an employee or company as an incentive to sell more. A commission is generally a percentage of sales.

Answer 12

Commission

Question 13

Different types of commissions

Answer 13

> Straight Commission
Salary Commission
( Salary +Commission)
Graduated/Incremental

Question 14

A compensation method in which the salesperson only gets a percentage of the sales volume and no fixed salary is paid.

Answer 14

Straight commissions

Question 15

A compensation method in which the salesperson not only gets a percentage of the sales volume but also a fixed salary is paid.

Answer 15

Salary commission

Question 16

A compensation method wherein the commission depends on the amount of the sales made.This type of commission if earned as a percentage of sales increases incrementally with the increase of the sales volume. Generally used by a business to incentivise the sales force for better performance

Answer 16

Graduated/Incremental Commission

Question 17

A person who bought these shares from the corporation and a part owner of a corporation to the extent of the number of his shares.

Answer 17

shareholder