2. IDENTIFYING ECONOMIC
ACTIVITIES
•One must identify that the transaction will
affecting the company’s economic condition. E.G
payment of staffs’ salaries
RECORDING
•After identified the transaction, it must be record in accordance to
certain sequence or system
COMMUNICATING
•The activity of reporting the identified and
recorded information to potential users.
3. USERS OF ACCOUNTING
CREDITORS
EXTERNAL INVESTORS
USERS
UNIONS
PUBLIC
INTERNAL
USERS
DIRECTORS
MANAGERS
EMPLOYEES
GOVERNMEN
T
4.
5.
6.
7.
8.
9. Sole proprietorship is a business owned by one person who is
involved in running and managing the business for profit. The law
does not recognize sole proprietorship as a legal entity.
Advantages Disadvantages
•Easy to establish and
dissolve.
•The owner has sole control
over the business.
•No profit sharing.
•Flexible regulations
compared to other types of
business.
•Difficult to expand due to
limited skill and capital.
•The risk is solely on the
owner.
•Unlimited liability
10. Partnership exists when two or more (2 - 20)
individuals share the ownership of a single business
for profit. Contractual relationship can be formed
through written or verbal agreement. The details of
the agreement normally cover the management of
the business such as capital contributions and how
profits/losses are to be shared. In Malaysia, this type
of business is registered under the Partnership Act
1961.
Legally, partnership is not a separate entity. Partners
are jointly responsible for their business. This means
that anyone with outstanding payment from the
company can claim payment from any or all of the
partners. Each of the partners is liable towards the
partnership’s debt.
11. ADVANTAGES AND DISADVANTAGES
OF
PARTNERSHIP
Advantages Disadvantages
•Larger capital as the
owner is more than one.
•Partners with skills and
abilities can strengthen the
business.
•Not bound by requirement
on disclosure of business
information to public as
imposed on limited
company.
•Unlimited liability.
•Possible clashes among the
partners that can affect
the stability of the
management.
•Problem on business
continuity arising from the
death of a partner.
