ACCBP 100 – Accounting Plus
ULOa. Discuss the nature of business and its
relationship in management.
&
CONCEPTS
Business is an organization or entity, engaged in
commercial, industrial, or professional activities.
It also refers to the organized efforts and activities
to produce and sell goods and services for
profit
Why business is important to
a country’s economy?
It provides goods and services.
It provides jobs.
It is the government’s primary source of revenue
(taxes).
RELATIONSHIP BETWEEN BUSINESS &
THE ECONOMY
Pays for the goods and services
Produces goods and services
Economy Business
provides the factors of productions
Pays for the factors of production
ELEMENTS OF A BUSINESS SYSTEM
Land Labor
(Materials) (Manpower)
Business
Enterprise
Capital Entrepreneur
(Money) (Management skill)
WHY KNOWLEDGE AND SKILLS IN
MANAGEMENT IMPORTANT TO BUSINESS?
THE PROFIT MOTIVE
The primary motive of engaging
into BUSINESS is to earn
PROFIT!
To achieve this, an entrepreneur
needs knowledge and skills in
MANAGEMENT.
WHEN DOES A BUSINESS
EARN A PROFIT?
Profit = Income - Expenses
RESPONSIBILITY OF A BUSINESS
ENTERPRISE
Owners
Stakeholders of the
Busines
s Workers
Association
businesses
Labor
BUSINESS FIRM Customer
Union
Commu
Supplier
nity
Govern
ment
WHY PEOPLE ENGAGE IN BUSINESS
HIERARCHY OF NEEDS
Abraham W. Maslow
REASONS OF ENGAGING TO
BUSINESS
Self-fulfillment need
the need for the realization of personal goal or ambition.
Ego or self-esteem need
the need for self-recognition or group satisfaction
Social need
the need for group belongingness, affection, love, and friendship
Safety need
the desire for security, stability, or protection against danger
Physiological or biological need
the essentials for survival
KINDS OF BUSINESS
1. Industry
(Manufacturing)
2. Commerce (Trading or Merchandising)
3. Services Enterprise
Public & community service
Professional or trade service
Recreation Service
Personal Service
INDUSTRY
(MANUFACTURING CONCERN)
transforms raw
materials into
finished goods
and sell them.
COMMERCE
(TRADING / MERCHANDISING CONCERN)
Involves buying
and selling of goods
which are ready for
sale
SERVICE
Public & community
service
Professional or trade
service
Recreation Service
Personal Service
KINDS OF ECONOMIC SYSTEM
1. CAPITALISM
2. SOCIALISM
3. COMMUNISM
CAPITALISM
a system in which the means of production are
owned and operated by private individuals. It
is a system of economic organization wherein
privately-owned capital, and property rights
are privately invested with the ultimate aim of
personal gain.
SOCIALISM
an economic system in which the production
and distribution of goods are controlled
substantially by the government rather than
by private enterprise, and in which cooperation
rather than competition guides economic
activity.
COMMUNISM
is a system of organization in which all social
and economic activities are controlled by a
authoritarian government.
KINDS OF ECONOMIC SYSTEM
CRITERIA IN CLASSIFYING
PHASES OF ECONOMIC DEVELOPMENT
A. Means of Livelihood
B. Extent of Economic Activity
C. Medium of Exchange
PHASES OF ECONOMIC
DEVELOPMENT
A. Means of Livelihood
1. Hunting and Fishing Phase
2. Pastoral Phase
3. Handicraft Phase
4. Agricultural Phase
5. Industrial Phase
PHASES OF ECONOMIC
DEVELOPMENT
B. Extent of Economic Activity
1. Household Economy
2. Village Economy
3. National Economy
4. International Economy
PHASES OF ECONOMIC
DEVELOPMENT
C. Medium of Exchange
1. Barter Economy
2. Money Economy
3. Money & Credit Economy
LEGAL FORMS OF
BUSINESS OWNERSHIP
ADVANTAGES & DISADVANTAGES
SOLE PROPRIETORSHIP
Advantages Disadvantages
1. Easy to set up/start 1. Demanding on owner's
2. Decision-making is personal time
Sole left entirely to owner 2. Growth limited by
Proprietorship owner’s financial
means
ADVANTAGES & DISADVANTAGES
PARTNERSHIP
Advantages Disadvantages
1. Relatively easy to set 1. Dissolution of
up partnership by any
personal rifts
2. Checks and balances between partners
Partnership maintained with two
parties around 2. Equal profit sharing
despite unequal
attention and time
given by partners to
business
ADVANTAGES & DISADVANTAGES
PARTNERSHIP
Advantages Disadvantages
1. Maximum flexibility 1. Complicated
2. Limited liability of setting–up process
individual share. 2. Limited influence on
3. Greater room for management by
professionalism. stockholders.
4. Dissolution is least 3. Tendency to
Corporation likely to occur. institutionalize
5. Can involve a wide bureaucracy.
range of people in
business including
employees.
6. Reduced tax burden
on owners
POSITIVE VALUE OF A FILIPINO
ENTREPRENEUR
1. Pakikipagkapwa tao (Human Relations)
2. Bahala na (let fate decide the outcome)
3. Pakikipagsapalaran (Risk-taking)
4. Gaya-gaya (imitation)
5. Utang na Loob, hiya, awa, bayanihan (debt of
gratitude, shyness, compassion, unity)
6. Kasipagan (industrious)
7. Pagtitipid (wise spenders & savers)
8. Pagtitiis (Enduring)
9. Pagtitimpi (Self-control)
10. Katapatan (Honesty)
SOCIAL AND ECONOMIC
CONTRIBUTIONS OF ENTREPRENEUR
1. Creates employment
2. Improves the quality of life
3. Contributes to more equitable distribution
of income taxes and therefore eases social
unrest
Thank you!
