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Accounting

In: Business and Management

Submitted By gabgab
Words 3291
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1. Type of business, which form do you recommend and why?
The most recommended and simplest form of business is a sole proprietorship. An individual proprietor owns and manages the business and is responsible for all transactions. The owner is also responsible for all debts and liabilities. A sole proprietor can own the business for any duration of time and sell it when he or she sees fit. As owner, a sole proprietor can even pass a business to heirs. In this type of business, there are no specific business taxes paid by the company. The owner pays taxes on income from the business as part of personal income tax payments. Sole proprietors need to comply with licensing requirements in the states in which they're doing business, as well as local regulations and zoning ordinances. The paperwork and formalities, however, are substantially less than those of corporations, allowing sole proprietors to open a business quickly and with relative ease from a bureaucratic standpoint. It can also be less costly to start a business as a sole proprietor, which is attractive to many new business owners who often find it difficult to attract investors.
Advantages of a Sole Proprietorship
• Sale or transfer can take place at the discretion of the sole proprietor.
• No corporate tax payments.
• Minimal legal costs to forming a sole proprietorship.
• Few formal business requirements.
• Easy and inexpensive to form: A sole proprietorship is the simplest and least expensive business structure to establish. Costs are minimal, with legal costs limited to obtaining the necessary license or permits.
• Complete control. Because you are the sole owner of the business, you have complete control over all decisions. You aren’t required to consult with anyone else when you need to make decisions or want to make changes.
• Easy tax preparation. Your business is not taxed separately, so it’s easy to fulfill the tax reporting requirements for a sole proprietorship. The tax rates are also the lowest of the business structures.

2. Location of the business
Ariana Rose Patisserie is a dessert bar and bakery located in The Sphere, Bangsar South City, Kuala Lumpur. The Sphere is Bangsar South’s boutique mall facility where residents and workers can look forward to recreation, relaxation, and retail therapy right at their door step. The Sphere is a 3-storey retail space. Here, a wide array of outlets available to accommodate every need and taste. Other tenants range include restaurant, beauty salons, fitness studios, hardware shops, home improvement outlets, and fashion outlets. As a result, there is something to keep everyone entertained. The al fresco dining concept at The Sphere allows patrons to be surrounded by beautifully landscape gardens and water features, where guests can listen to the soothing sound of cascading water. Many basement parking bays are also available. The Sphere is along Kerinchi, so it is easily accessible via the Federal Highway and the New Pantai Expressway. It is also accessible by bus and is close to the Universiti RapidKL train station.

3. Aim or objectives of the business
Ariana’s goal is to start a dessert bar and bakery specializing in providing quality baked goods and refreshing beverages to the customers within the next 6 to 12 months. Ariana’s first objective is to write a business plan within the next 3 months Ariana’s second objective is to contact an attorney, realtor, and her banker for technical assistance as she starts her business in the next 6 to 12 months. Her third objective is to have $10,000 in sales in her first year of business.

4. Who is your target customers
Ariana Rose Patisserie is perfectly nestled at the heart of Bangsar South City, a home of more than 80 esteemed companies. The population catchment here also includes residents of condominiums nearby such as Pantai Hillpark, Centrio, Andalucia, Pantai Panorama, among others. It will cater workers and students of the nearby businesses and universities who are looking for a place to dine and relax during lunch hour or after work or study, and even a place to entertain clients.

5. What are the regulations you have to follow
• You need to register your business.
• You need a permit from the local authorities for using a premise to set up shop [i.e. subject to suitability as to environment, health, fire regulations, etc.]
• You may also need a permit from the Islamic Religion regulations Dept.
• You may also need a certificate of bakery knowledge/ skills competency.
• Health certificates of all staff
• Every producer or manufacturer / food premise / slaughter house must produce only Halal products.
• Every company that applies for the Halal Confirmation Certificate must ensure that the source of ingredients is Halal and they must choose suppliers or sub-contractors that only supply Halal goods or have Halal Confirmation Certificates.
• All companies must ensure that Halal procedures are observed in all aspects as underlined in the Malaysian Halal Certification Procedure Manual.
• A company that is listed under the Multinational and Small & Medium Industry (SME)category is required to establish an Internal Halal Audit Committee and appoint an Islamic Affairs Executive (Islamic Studies) to oversee and ensure compliance of Halal certification procedures;
• Required to have a minimum of two permanent Muslim workers of Malaysian nationality in the kitchen / handling / food processing section
• Products must be clean and do not contain non Halal ingredients as per Islamic law , during preparation, handling, processing, packaging or transfer
• Equipment and appliances used on the premise must be clean and free of contamination by impurities based on Islamic law and not detrimental to health
• Transportation used must be specifically for Halal product delivery only
• The cleanliness of equipment, transportation, manufacturing area and environment must be of utmost importance and the company must incorporate good manufacturing practices;
• Religious worship paraphernalia are not allowed on the premise / food processing area.
• Employees must adopt good work ethics and good hygiene practices such as the following:
• All employees must receive certain specified injections at any health centers recognized by the government, before and after being taken into employment
• All employees must maintain good health and cleanliness, especially those who work as production operators;
• Employees who are sick or injured or suffering open wounds that could jeopardize production quality must not be allowed to work until they have recovered
• Direct contact between employees’ hands and raw materials or unfinished products must be avoided;
• Smoking, eating, drinking or storing of food, drinks, cigarettes or medicines must be done in specially designated areas and not allowed in the production area or any other area so as not to jeopardize quality of production;
• All personnel entering the production area must wear proper factory attire or clean and decent clothing (if there is no designated factory attire) according to the health and cleanliness procedures. This applies to permanent and part time staff, management personnel, visitors and so on
• Employees must practice good hygiene and wear proper attire, head and mouth cover, gloves and proper shoes
• Employees must wash their hands thoroughly with appropriate hand sanitizers;
1. Before starting any food handling activity
2. After using the washroom
3. After handling raw material or contaminated material etc.
• Employees are not allowed to wear jewelry, watches etc at the food processing area to avoid possible contamination during the food handling process
• Employees must always be present at their designated duty areas, for example at the Halal quality check point and Halal raw material purchase point
• Employees must be responsible and committed to abiding by the underlined Halal policy.

6. Strengths that the business possess
• Location o Ariana Rose Patisserie is perfectly nestled at the heart of Bangsar South City, a home of more than 80 esteemed companies. The population catchment here also includes residents of condominiums nearby such as Pantai Hillpark, Centrio, Andalucia, Pantai Panorama, among others.

• Ambience o Ariana Rose Patisserie delights our customers with a homely and relaxing ambience as they dine and chat over a cuppa. Customers can waltz through our selection of “happy food”, accompanied by a list of refreshing beverages. Customers can just sit, back and enjoy our fine delicacies with the love ones, buddies and colleagues. Even if they are alone, we have made this place where they can feel at ease. After all, we call this “home”. o We can loosely be described as a quick-service restaurant where customers have options to sit around a bar and watch their desserts being made. The show, as well as the dessert, is our main selling point.

7. Challenges that the business might face
Baking bread day in and out, constantly meeting new people, and watching those people enjoy your labors may seem ideal for anyone desiring to open a bakery, but owning a bakery isn’t always easy or enjoyable. Bakeries have long hours and face a long list of challenges that can be predictable and unpredictable. To help you cope with the seen and unseen challenges of owning a bakery it helps to educate yourself about them before even opening your bakery's doors.

Finding Great Bakery Employees
Retail and restaurant businesses are notorious for their high turnover rates due to the transient, unskilled workforce that drives them which can make finding good employees for your bakery difficult. To find and keep better employees in your bakery consider using the following:
• Higher Pay: Although paying employees more means higher labor costs for your bakery, it could provide a more loyal workforce in the grand scheme of things. Even $.25 more than your bakery's competitor can make a dramatic difference.
• Flexible Scheduling: Flexible scheduling lets employees choose which shifts they want to when they are hired, not walk all over you. Flexible scheduling makes employees feel like you care about their needs which creates greater loyalty.
• Employee Incentives: If an employee feels like they have a future in your bakery or will be rewarded for staying in your bakery, they are more likely to stay.

The Beginning Phase
The first few months, or even first year, of owning a bakery are always the most difficult. There are endless demands that need to be met while the constant challenge of drawing new customers is always present. Two of the biggest complaints for new bakery owners are:
• Initial Investment: There is always an initial investment associated with opening a bakery whether it be a franchise or your own independent bakery. Becoming a bakery franchisee general requires an average investment of $250,000 and although starting your own bakery might be cheaper, it doesn’t come with the franchise perks such as mentors and effective marketing strategies.
• Long Hours: Bakeries tend to open very early to bake all fresh goods needed to keep shelves stocked and display cases full. Expect to have 14-16 hours days when you first start your bakery. It’s just part of being a bakery owner.

Price Fluctuations
Some of the raw materials used by bakeries are subject to extreme fluctuations in cost on a yearly basis. According to the 2011 "Bakeries Industry Snapshot" report prepared by the Center for Economic Vitality, the price of wheat can change by up to 40 percent over the course of a year, as can the price of vegetable oil. The price of natural gas can change by up to 25 percent. These changes can severely affect the bakery's profit margin unless the cost is passed on to consumers. One way to minimize this risk is to negotiate a contract for a fixed price on raw materials.
Limited Growth
Malaysia market for baked goods is already served by a large number of bakeries both large and small. The willingness of consumers to pay more for specialty breads and pastries depends on the health of the overall economy, and growth in this industry is limited to population growth at approximately 1 percent every year, according to a June 2011 Bakery Industries Snapshot from the Center For Economic Vitality. Most bakery businesses only grow by buying out their competitors or taking a portion of their business. One way to improve growth is by offering artisan breads not readily available elsewhere and catering to specialty diets such as the gluten-free diet. Small bakeries often have an advantage in this situation, because they can more easily adjust to local tastes.
Health and Safety
Some of the health and safety regulations larger bakeries must follow do not apply to smaller operations. This might seem like an advantage, but it also carries substantial risk. Bakers used to believe that the high temperatures used in baking would kill any pathogens, but this is now known to not be the case in all situations. When bakeries use "low water activity" methods to make their products more stable, any bacteria in those products can also become resistant to high temperatures. Bakeries offering products that cater to special diets also have to use rigorous procedures to avoid cross-contamination, or they could expose customers to an allergen or other hazard. A product recall or a case of illness caused by a bakery product could cause a sharp drop in business. To reduce this risk, follow the strictest procedures and policies for food safety.

The challenges that you will face as a bakery owner will continue throughout ownership, but will dwindle as your bakery's business matures. Although the initial phases of owning a bakery are difficult, those who have a passion for their bakery will be able to succeed in when things get tough

8. The sources of the capital to start the business

There are numerous costs involved in starting a business and one of the entrepreneur’s early challenges is in raising capital. If you plan on becoming a successful entrepreneur, you’ll need to be smart in raising the money and investing it wisely in your business. We highlight several sources of capital for start-ups.

For the aspiring entrepreneur, coming up with the capital required to start a business isn’t easy, especially with a mortgage and car loan to pay and a family to support. Despite the challenges, true entrepreneurs often find their way around to raise the funds needed to realize their dreams. There are several ways of raising capital, the most common being own savings. But before you go around sourcing for funds, you’ll first need to ascertain how much you need, when you need it and what you are going to do with it. Listed below are several methods of sourcing for capital.

BOOTSTRAPPING
The most convenient method of raising funds is through your own means, which is also known as bootstrapping. Sources of funds include your savings, investments such as shares, unit trusts and property, your life insurance, etc. Apart from this, you can also obtain funds via personal loans, overdrafts and credit cards. Beware of credit cards though, as the interest rates are very high.

BORROWING FROM FAMILY & FRIENDS
Although borrowing from your family and close friends is considered informal, it is advisable to draw up a formal agreement on the terms and conditions of the loan, such as interest rate, tenure of loan and repayment schedule, to avoid any unnecessary disputes in the future.
FUNDING BY INVESTORS
This involves raising funds by selling a part of your business to individuals or companies or venture capitalists (VCs) who see potential in your intended business. To seek funding from investors, you’ll need to prepare a business plan to be presented. Your business plan must include the following details:
• Executive Summary – highlighting the main points to capture the reader’s attention
• Market Research – details of the market, competitors and potential customers
• Marketing Plan – how you will sell your products or services to your target market
• Financial Information – including profit/loss and cash flow forecasts

BANK LOANS
Banks lend money to existing businesses but for a start-up, it may be very difficult to get a bank loan without a track record. Just as venture capitalists, banks also require a sound business plan and must be convinced of the viability of your business before they agree to lend you money. Banks normally need collateral, which is something of value to hold against the loan. It’s important to establish a good, working relationship with your banker.
As a start-up, one of the banks you can approach is the SME Bank, which is a development financial institution and a wholly-owned subsidiary of Bank Pembangunan Malaysia Berhad. SME Bank’s mission is to facilitate the development and promotion of enterprising, committed and innovative SMEs across industries and phases of business growth. SME Bank offers the SME Start-Up, which is targeted at new businesses and start-ups that have a prototype and are ready to commercialize their products or services. The bank may be able to assist even those who do not have sufficient collateral or track record. To support greater entrepreneurship in Malaysia, the SME Start-Up has been designed for all new businesses across SME classifications and industries including ICT and agro-based activities and is specially targeted towards businesses with market-viable products or services ready for domestic and/or international commercialization.
Apart from SME Bank, corporations such as the Malaysian Industrial Development Finance Berhad (MIDF) also offer loans to start-up SMEs. You are advised to enquire with the many Government agencies and commercial banks to find out more about the loans available to new businesses.

GOVERNMENT GRANTS A HELPING HAND
One of the Government’s overall strategies of supporting local SMEs is in facilitating easier access to financing. The Government, through various ministries and agencies, provides financial assistance such as loans and grants to support the development of SMEs.

Matching Grant for Business Start-Ups
This scheme is offered by the Small and Medium Industries Development Corporation (SMIDEC) and provides assistance for business start-ups in the manufacturing and service industries (excluding insurance and financial services). Assistance is given in the form of a matching grant where 50% of the approved project cost is borne by the Government and the remainder by the applicant. For enterprises in the manufacturing sector, incorporated under the Registration of Business Ordinance 1956, assistance is given up to 80% of the approved cost. The maximum grant allocated per application is RM100,000.

Cradle Investment Programme (CIP)
If you’re creative, innovative and aspire to be a technopreneur, you can get a head start for your idea with the CIP. The CIP is Malaysia’s first development and pre-seed funding programme for technology ideas. It enables budding innovators and aspiring innovative entrepreneurs to make the jump from just having an innovative technology idea to becoming a successful start-up. The CIP offers conditional grants of up to RM50,000 per tranche per idea (up to a maximum of three conditional tranches) for innovative technology ideas with good commercialization potential, submitted by aspiring groups of technopreneurs. The CIP is managed by Cradle Fund Sdn Bhd, which is wholly-funded by the Ministry of Finance.

MDeC Pre-Seed Fund
This fund is introduced by the Multimedia Development Corporation (MDeC) to develop ICT business plans into commercial projects. The programme offers up to RM150,000 of conditional funding for local individual technopreneurs (not existing companies) to turn their business plans into viable projects. This is a development programme that is not a pure grant and recipients will also benefit from mentoring services and the use of shared lab facilities at MSC Malaysia Status Incubators provided through MDeC’s Technopreneur Development Programme.

Raising funds is not limited to the methods discussed above. As what’s listed is not exhaustive, you are advised to find out more about the grants, funds and loans available to SMEs from the respective Government ministries and agencies. Do your homework to seek different avenues if needed. This is where a little creativity and a bit of thinking out of the box go a long way.

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...Electronic Accounting in Today's World Leigh M., Yahoo! Contributor Network May 18, 2007 "Contribute content like this. Start Here." .More: Accounting Software Accounts Receivable Accounting Accounting Degree .Share on Facebook Share on Twitter Print Flag Close 4 Helpful? Post a comment Just about everything in the world today has been affected by technology. Particularly, accounting has been affected to the highest degree. There is less paperwork and less guesswork. Accounting software has made accounting much easier to deal with by saving all the information one enter into the system and distributing it the data amongst all the proper locations. There is only one thing accounting software has not simplified is deciding which software to use. If one were to look up the words "accounting software" on google.com one would receive nearly six million results. However, I will only discuss two. Best Software's Peachtree Complete Accounting and Intuit's QuickBooks Pro are two of the most popular small business solution systems on the market today. Peachtree offers five levels of current software ranging from $99.00 for a beginner's version to $499.00 for a premium version. QuickBooks offers six levels of software ranging from $19.95 for an online version to $3,500.00 for an enterprise version. Except exactly how do the two softwares compare in everyday use? Both can integrate with Microsoft Excel. Both systems have accounts payable, accounts receivable, etc. One can......

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...(a) Joe Delong is not sure about the difference between cost accouting and a cost accounting system. Explain the difference to Joe. Answer: Cost accounting involves the measuring, recording, and reporting of product costs. A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company. (b) What is an important feature of a cost accounting system? Answer: An important feature of a cost accounting system is the use of a perpetual inventory system that provides immediate, up-to-date information on the cost of a product. 2. (a) Distinguish between the two types of cost accounting systems. Answer: The two principal types of cost accounting systems are: (1) job order cost system and (2) process cost system. Under a job order cost system, costs are assigned to each job or batch of goods; at all times each job or batch of goods can be separately identified. A job order cost system measures costs for each completed job, rather than for set time periods. Under a process cost system, product-related costs are accumulated by or assigned to departments or processes for a set period of time. Job order costing lends itself to specific, special-order manufacturing or servicing while process costing is better suited to similar, large-volume products and continuous process manufacturing. (b) May a company us both types of cost accounting systems? A company may use both types of systems. For example, General......

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Accounting

...When comparing Managerial Accounting information and Financial Accounting information, which of the following, related to Managerial Accounting information, would be true?(It is concerned with estimates of the results of future activities) 2.In which account are the costs of manufacturing a product (that is ready for sale) accumulated until such time as the product is sold? (Finished Goods Inventory)3. Fardohnya Industries, Inc. reports the following information at 12/31/2012: -Acquired $75,000 cash by issuing common stock -Paid $70,000 cash for materials used in the manufacture of 200 units of product -Paid $16,000 cash for administrative salaries -Paid $35,000 cash for factory wages -Recognized depreciation on factory equipment, $5,000 -Collected $160,000 cash on sales made during 2012 -Recognized depreciation on office furniture, $3,500. Fardohnya makes all sales for cash. There are no credit sales. What is the total product cost?(110,000)* Product costs consist of materials used, labor applied, and overhead. Fardohnya, therefore, has a total product cost of $110,000 ($70,000 + $35,000 + $5,000).4. Fardohnya Industries, Inc. reports the following information at 12/31/2012: -Acquired $75,000 cash by issuing common stock -Paid $70,000 cash for materials used in the manufacture of 200 units of product -Paid $16,000 cash for administrative salaries -Paid $35,000 cash for factory wages -Recognized depreciation on factory equipment, $5,000 -Collected $160,000 cash on sales made......

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