FBT

Business Organization| F1/FBT ACCA notes

Business Organization| F1/FBT ACCA notes

An organization is an organized group formed by a gathering of people who share a set of common goals.
Organizations offers consumers with goods or services (or both), to be able to govern their own performance, and to provide a barrier between them and the environment. Organizations have an influence on the environment, and numerous environmental conditions have an impact on them.

Organization is differ in term of,

Ownership and control: Some organizations are sole proprietorships and are owned and controlled by one owner while others are partnerships where two or more people jointly own and control an organization. Public listed companies are owned by general public and controlled by board of directors.

Activity: Different organizations provide varying goods and services. Some organizations are manufacturing concerns like General Motors and Ford while other companies provide services like law firms and audit firms.
So activity for an organization is maybe different from other organization in a business

Legal Status: Limited corporations and partnerships in the United Kingdom are founded under the UK Company Law, while partnerships are formed under the Partnership Act 1890.

Profit or Not for Profit Organizations: Some organizations exist to make a profit like Honda while other organizations exist to serve the society or environment like Red Cross and Make a Wish Foundation.
Why

Level of Technology: Various levels of technology are used by businesses. There are certain companies that use modern technology, such as Samsung and Airbus, while others, such as Walmart, use basic technology.

Manufacturing Sector

Transforms raw materials into finished, saleable products with the use of equipment and labor. Ex Volkswagen Group.

Extractive Sector

This industry derives its goods from natural resources such as the earth, the sea, and the air. It refines and extracts raw materials. Ex Shenhua Energy-Coal.

Construction Sector

This industry is involved in the construction of bridges, skyscrapers, and highways. Ex Grupo ACS-Spain.

Retailing/Distribution Sector

This industry buys finished goods and sells them to the general population. Ex Tesco 

Service Sector

Groups that provide services to customers are included. Services can be of any type, including medical, legal, and other services. American Express.

Types of Business Organization

Commercial Sector: Organizations that make a profit are also known as value profit making organizations such as Sole traders -Partnerships -Private limited -Public limited.

Not For Profit Organizations: These organizations do not exist to produce money; rather, they exist to help society or the environment.

Public Sector Organizations: The government owns or has control over these entities. They work for the people’s benefit.

Co-operatives: An organization or association whose facilities and services are jointly owned and administered by those who use them.

Commercial sectors

Profit is the goal of businesses in this industry. Their efforts are centered on the idea that their earnings should exceed their costs. These businesses exist to make a profit.

Types of organization in commercial sector,

Sole trader

The owner of alone trader business is in charge of the company. The organization is owned and controlled by a single person. Despite the fact that other individuals work for the company, the owner is ultimately responsible for its success. Such businesses have unlimited liability, which means that the owner is responsible for all of the company’s debts.

Partnership

When 2 or more persons pool their resources to collectively own and manage a firm, they form a partnership. As a result, the business’s liability is shared among the partners.

Limited companies

The power and authority of a business are legally separated in limited businesses. They are controlled by a Board of Directors and owned by shareholders who provides the fund to run the business. Limited companies can be divided into two categories:

  • Private limited company
  • Public limited company

Difference between Private and public companies:

S.NOPrivate companyPublic company
1Owned by Friends and familyOwned by General public
2Privately (not on stock market)On the stock market
3Venture CapitalistsInstitutional Investors
4Provide funds by foundersShared capital raised by public

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And if you are student of FA1 then must read our notes for FA1 it will help to understand all the concepts for FA1 exam.

Chapter 1: Business transaction and documentation-FA1(ACCA)

Practice questions: ACCA-FA1 practice questions-chapter 1

Chapter 2: Asset and liability (Accounting Equations)

Practice question: ACCA practice questions for (Asset and liability) FA1 practice question

Chapter 3: Recording, summarizing and posting transaction & Double entries for sales, sales tax (FA1 pending topics)

Practice questions: FA1 exam question for recording, summarizing & posting transaction

Chapter 4: Receiving money and checking

Practice questions: Practice questions for FA1 (Receiving money and checking)

Chapter 5: Purchase day book and purchase return-ACCA FA1

Practice questions: Practice questions for Purchase day book and purchase return day book

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