MARCOS, Dominique A.

11442638
ACCTBA1 C38

1. Why would Rosario or anyone else go into business?

People go into business to create a source of income or additional income. Other
possible reasons are because they want to be able to utilize their talents, skills and
abilities; because they would rather manage their own business rather than work
for one; and because they would like to help their country’s economy.
2. How will accounting meet the information needs of business owners like Rosario?
Accounting meets the information needs of business owners like Rosario through
the presentation of all the information that can determine whether the business
gains more income than the expenses they lose. It can also present to business
owners an accurate depiction of how the business is going, such as their amount
of debt or the amount owed to them. Accounting gives them the information on
how to go about the next step for their business.
3. How well did Rosario Dress Shop perform during the year?
Rosario’s Dress Shop performed well during the year because from a capital of
Php 50,000, Rosario gained a net income of Php 31,800 by the end of the year.
Because of the additional net income, her capital became Php 81,800. Rosario’s
total assets of Php 94,300 also held a bigger amount than her total liabilities of
Php 12, 500. The cash balance available at the end of the year was Php 19,300.
4. What are the factors to be considered in assessing the equity of a business owner
like Rosario?
The factors considered in assessing the equity of a business owner are the owner’s
initial investment, the net income added through business operations, and the net
loss during the period.
5. What identifies a strong financial position of any company?
A strong financial position of a company can be determined through the owner’s
assets and liabilities. If a business, like Rosario’s, obtained more assets than
liabilities, it would cause a large amount of owner’s equity which makes a strong
financial position for a company.