Business Accounting Assignment

Topics: Types of companies, Business law, Corporation Pages: 3 (735 words) Published: October 23, 2013
Business is an organisation involves in trading activities of goods or services or both. Business can be a profit organisation or a non profit organisation. There are three types of profit organisation in business. First type is Merchandising Business which involves purchasing and selling the products that they purchase. They do not manufacture the products. Example of this business is Parkson, who purchase clothings, toys and other products from various manufacturers and then sell in their department store. The second type of business is Manufacturing Business. This organisation manufacture and sell it own product. Example of this business is Intel who manufactures processors and motherboards for computers. The third type of business if Service Business. This organisation provides services instead of product. Example of service business is AIA insurance which provide insurance services to the customer.

Organisation is a group of people working together in a business. There are three common forms of business organisation.
First is Sole proprietorship which is also known as sole traders. Sole proprietorship is a business owned by a single owner, all the profit of the business will be owned by the owner himself and the owner also is responsible for all the losses incurred by the business. This a simplest form of business entity and is easily setting up and have lower cost. The disadvantage of this organisation is that the financial resources are limited. Example of sole proprietorship is the grocery stores nearby our house.

Question 1 (b) cont.
The second type of organisation is partnership which can be consists of two or more business partners. In order to form a partnership, a verbal or written agreement on profit and loss distribution, duties and compensation or benefits of the partners need to be form. Example of partnership will be legal firms or audit firms which are forms by more than one lawyer or audit. The third type of...
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