What is an Entrepreneur?

 An entrepreneur is an inventor and developer of ideas, change agent, creative, persistent, and class of having
his own value system.
 The approach of an entrepreneur is focused on growth and expansion orientation.
 As a dynamic process, an entrepreneur goes to a stage that is nurtured by his immediate environment and the
kind of scenarios and experiences he has gone through.

Qualities of a Good Entrepreneur

Energetic, Need to achieve, Task oriented, Risk taker, Emphatic, Persistent, Result oriented, Enterprising, Nurturing,
Effective, Understanding, Reliable

Nature and Significance of Accounting

Accounting is a useful study because it tries to analyze and solve financial and economic problems which
are two of the most critical areas affecting everyone – husband, wife, student, employee, businessman.

 A housewife needs to budget the money entrusted to her by her husband.

All of us, from the simple housewife to the giant corporation have one thing in common: we need financial
information before making decisions. It emphasized at this point that decision making is the primary reason for
preparing accounting records and reports.

BUSINESS, ITS VARIOUS MOTIVES AND ROLES

A business is an economic unit that controls resources and engages in buying and selling of goods or
services. A major problem in business is determining how best to use the resources – what machines are needed,
what labor skills are required, how many men to employ, how much fixed capital and working capital are needed, what
raw materials to be used.

Success is measured in terms of profit and increase in funds. Profit is obtained when you receive more for goods and
services sold, than the amount you paid for the goods and services you gave.

A business plays a vital role in society.

- it assists the government in developing the economy by the taxes it pays,

Business Organization Forms and Types

Sole proprietorship is a business owned and managed by one person who enjoys all the profits by himself. This is
ideal for a business which does not need a large amount of capital and which operation is simple and manageable.

Partnership is a business owned by two or more persons who contribute money, property and or service with the
intention of dividing the profits among themselves. The inventors are called partners and they themselves manage the
business.

Corporation is a more complicated form of business requiring the registration and approval of its Articles of
Incorporation by the Securities and Exchange Commission. The investors are called stockholders whose rights over
the business are expressed in the number of shares bought and are evidenced by certificates of stock. The
management of the business is however entrusted to a few stockholders called the Board of Directors.

According to Nature of business

Service business is the simplest type of business, which renders service to a client or customer for a fee. Examples
are the schools, airlines, travel agencies, barber shops, beauty parlors and the like.

Merchandising business is one which buy goods or merchandise and sells these at higher prices. Examples are
bookstore, drugstore, groceries, supermarkets, boutiques and shoe stores.

Manufacturing business is one which buys material in its raw form, processes this into a finished product, then sells
this at a price higher than its cost. Examples are the garment factories, shoe factories, drug laboratories, and food
processing companies.

Accounting is the art of recording, classifying, summarizing in a significant manner and in terms of money,
transactions and events, which are in part, at least, of financial character and interpreting the results
thereof as defined by the Committee on Terminology, American Institute of Accountants. It is “the
language of business.”

Four Phases of Accounting

1. Recording this is technically called bookkeeping. Bookkeeping is only a part of accounting – the
recording phase.

Kinds of Bookkeeping:
a. Single entry bookkeeping does not show the two-fold effects of business transactions. It only shows the
debit or the credit of each transaction.
b. Double Entry Bookkeeping reflects the two-fold effects of business transactions. It has a debit and a
credit.

2. Classifying items are sorted and grouped. Similar items are classified under the same name. They may be
classified as asset accounts, liability accounts, capital accounts, revenue accounts, and expense accounts.

3. Summarizing after each accounting period, data recorded are summarized through financial statements.

4. Interpreting usually, due to the technicality of the accounting reports the accountant’s interpretation on
the financial statement is needed. In this case, analysis reports are submitted together with the financial
statements.
Fields of Accounting

Public Accounting it is a professional service rendered by a Certified Public Accountant and his employees
to the public for a fee.

Services offered by a public accountant:

1. Auditing this is the principal service that a public accountant offers.

2. Management advisory services this includes the design, installation, and improvements of the firm’s
general accounting system and other system deemed necessary for controlling and distributing
manufacturing costs. In addition, advises on financial planning, budgeting, forecasting, and inventory
control are offered.

3. Tax Services this includes preparation and filing of income tax returns.

Private Accounting it is an accounting job done in private business enterprises. The number of accountants
in the firm depends upon the size and the needs of the business.

1. General Accounting this includes the recording transactions and preparing financial reports for the use
of the management, owners, creditors, governmental units, and other interested parties.

2. Cost Accounting this has to do with the controlling, determining, and controlling costs particularly those
cots in producing product or service.

3. Budgeting this provides management a plan for future operations and after this plan has been applied,
summaries and reports comparing the actual accomplishments with the plan are provided.

4. Internal Auditing aside from the audit done by a public accountant, some business firms usually maintain
a staff of internal auditors who check the records prepared and maintained in each department or branch.

5. Government Accounting government officials, like private business firms, rely on accumulated
accounting data. Accountants are responsible for the accumulation of these data. They also check and
audit the income, payroll, and tax returns submitted to the government.

6. Accounting Education faculty members in Accounting in various colleges and universities are Certified
Public Accountant.

7. International Accounting this field of accounting is concerned with the transactions and special problems
of multinational business organizations in their dealings in the international trade.

8. Social Accounting this involves the measurements of social costs and benefits such as the measurements
of traffic patterns for the most efficient use of traffic funds.