LSC UoS BA Business - Accounting: Exploring Business Enterprise Types

This report provides an overview of accounting for business, focusing on different types of business enterprises: sole traders, partnerships, and companies. It explains the characteristics of each type, including sole traders with single ownership and risk, partnerships involving two or more persons sharing capital and revenue, and companies as larger entities with higher capital and risk. The report also distinguishes between authorized and issued capital, as well as individual notes payable and leases as forms of long-term debt for public limited companies. It concludes that accounting plays a crucial role in business development and competitive advantage, emphasizing the importance of ethical operations and professional accounting management. The assignment was submitted by a student and is available on Desklib, a platform offering AI-based study tools and resources for students.

Accounting for
business

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................4
TASK 1............................................................................................................................................4
The existence of three different types of business enterprise(Sole traders, partnerships and
companies) with examples..........................................................................................................4
TASK 2............................................................................................................................................5
Distinguish between two forms share capital and two forms of long term-debt in context of
long term sources of finance of public limited companies.........................................................5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In the functioning of a business at the marketplace, accounting plays a crucial role by
recording all the transaction related to monetary (Coate, 2018). It is the backbone for the
business which helps a company to develop at the marketplace, with major competitive
advantage in order to succeed at the marketplace (Christ, 2018). The companies at the
marketplace should develop perfect strategy for the business in order to survive with the
accounting solutions. In this project various types of businesses along with their significance is
explained in a precise manner. This report contains differences between two forms capital along
with two forms of long term debt in context of long term sources for public companies is
mentioned.

MAIN BODY
TASK 1
The existence of three different types of business enterprise(Sole traders, partnerships and
companies) with examples
The three various types of business enterprises are helpful in providing good economic
input and output to the whole economy (Tarca, 2021). It is major responsibility of a business to
develop and include various types of operations in order to fulfil specific wants and needs of the
customers. There are three different types of business enterprises which are mentioned below:
 Sole Trader- The sole trader-ship is a good economic activity which includes the
involvement of single owner. Sole trader-ship is an effective type of business in which
investment is performed by a single person and risk is also tackled by self. In the business
of a sole trader the owner enjoys all the profit which is earned by a business (G'iyosov,
2019). The sole trader-ship is an important business which composes of very small
number of functions. These traders are supposed to give tax to HMRC. London herbal
store is the good example of sole trader business which is present in the economy of
United Kingdom.
 Partnership- In partnership there is involvement of two or more persons who perform
business operations for earning profit. In this, a group of people shares the capital
invested and also the amount of revenue which is received by the business. Partnership is
also related to the task of setting business activities in a full operational manner for
growth and development of business (Hsieh, 2019). In this business, the profit which is
shared by the business entity should be also helpful in developing effective partnership.
Social chain is a good example of partnership business in UK which mainly includes the
involvement of two or more persons. Marks and Spencer is a good example of company.
 Companies- Companies are considered as large business activity, that is helpful in
developing commercial operations at the marketplace. In the functioning of a business,
the company has large number of capital invested and also the risk associated with
various operations is high (Swieringa, 2019). The companies are of two types public and
private companies which performs economic operations at the marketplace. Companies

should be effective in performing functions with including major functions in a
systematic manner.
TASK 2
Distinguish between two forms share capital and two forms of long term-debt in context of long
term sources of finance of public limited companies
In the marketplace, there are majorly two types of share capital which mainly includes
the major company's financial capital invested. The two forms of share capital are mentioned
below:
 Authorised capital- In the financial development of public limited company, the
authorised capital play a key role which includes, the amount of capital which is
mentioned in the memorandum of association (Madhani, 2021) The amount which is
stated in the authorised capital is termed as registered or nominal capital.
 Issued capital- The issued capital is referred to the amount of capital distributed in the
way of shares. Issued capital is mainly considered as the value of shares is which is
present for shareholders to develop at the marketplace (Agostini, 2017). The finance of
public limited companies is developed by share capital in a major sense.
Two forms of long term debt:
 Individual notes payable- The individual notes payable are the statements which are in
written format and contain a promissory note (Lev, 2019).. In the development of finance
from major sources, the individual notes payable develops a major role. In public limited
companies, the funds are taken from the sources and allotted to the functions and
operations of the company.
 Lease- In the lease, property of a person is given on rent for a fix time of future period of
the company in order to develop tenure (Ionescu, 2017). The lease is important part of
taking a property into consideration and performing sales of products and services to lead
the marketplace. In the recent times, lease is considered as an important way of
conducting business with the help of lease in order to earn huge revenue from the
marketplace. In the case of public limited companies, lease is the most important part of
conducting ethical business activities with a full fledge rent agreement.

CONCLUSION
From the above stated report it can be concluded that in a business, accounting play a key
role by developing a good business approach at the marketplace. In the business, the various
types of owners performs different types of functions and activities that are valuable for overall
growth and expansion of a business. This project concludes that in the business, it is important
duty of accounting management to perform operations with a major functions in an ethical
manner. The above discussion concludes that it is moral responsibility of a business to facilitate
long term business development with the engagement of professional accounting and operations
related employees. The above sated report also concludes, accounting is the crucial activity
which helps a business to gain competitive advantage.

REFERENCES
Books and Journals
Agostini, M. and Favero, G., 2017. Accounting fraud, business failure and creative auditing: A
microanalysis of the strange case of the Sunbeam Corporation. Accounting History, 22(4),
pp.472-487.
Christ, K.L. and Burritt, R.L., 2018. The role for transdisciplinarity in water accounting by
business: reflections and opportunities. Australasian Journal of Environmental
Management, 25(3), pp.302-320.
Coate, C.J. and Mitschow, M.C., 2018. Luca pacioli and the role of accounting and business:
Early lessons in social responsibility. In Research on Professional Responsibility and Ethics in
Accounting. Emerald Publishing Limited.
G'iyosov, I.K., 2019. THE THEORICAL FEATURES OF THE ORGANIZATION OF THE
STRATEGIC MANAGEMENT ACCOUNTING IN BUSINESS. Theoretical & Applied
Science, (9), pp.260-266.
Hsieh, C.C., Ma, Z. and Novoselov, K.E., 2019. Accounting conservatism, business strategy, and
ambiguity. Accounting, Organizations and Society, 74, pp.41-55.
Ionescu, L., 2017. Productivity accounting and business financial performance: a review of
current evidence. Economics, Management, and Financial Markets, 12(2), pp.67-73.
Lev, B., 2019. Ending the accounting-for-intangibles status quo. European Accounting
Review, 28(4), pp.713-736.
Madhani, P.M., 2021. Lean Six Sigma in finance and accounting services for enhancing business
performance. International Journal of Service Science, Management, Engineering, and
Technology (IJSSMET), 12(6), pp.141-165.
Swieringa, R.J., 2019. Building connections between accounting research and
practice. Accounting Horizons, 33(2), pp.3-10.
Tarca, A., 2021. Business Combinations under Common Control: Filling a Gap in IFRS
Standards. Australian Accounting Review..