EXPLAIN THE FOLLOWING (english and tagalog)

Control is applied to many functional areas in the business organization, particularly in accounting and marketing. These two departments generate important information regarding the overall performance of the company. The accounting department provides financial information that can help determine the financial stability of the organization. the marketing department, meanwhile, provides data on the company's sales performance.

Financial controls are important tools that determine whether the company is on track toward achieving its financial goals. Financial ratios are one of the control methods utilized in financial control. These rely on the information gained form financial statements, which are formal records of the financial activities of the organization.

Balance Sheet

- the balance sheet provides a summary of the company's financial position over a period of time. The balance sheet indicates financial information as of a certain period or date.

Three (3) major parts of a Balance Sheet

1. Asset- are things or resources that a company owns. These include things that the company has purchased or acquired. It is also includes costs paid in advance but not have been used like prepaid rent or prepaid insurance.

a. Current Assets include cash on hand, cash deposited in banks, prepaids or advance payments not yet used, accounts receivable, and inventory.

Accounts receivables refer to the sales of goods or services that are not yet collected, or sales still on credit. Inventory includes the cost of raw materials, work-in-process, and finished goods.

b. Property, plant, and equipment include assets such as land, buildings, leasehold improvements, equipment, furniture and fixtures, delivery trucks, machinery, and other capital owned by the company. These are examples of non-current assets or assets that cannot be easily converted to cash.

c. Intangible assets refer to the assets that do not have physical substance and may be hard to evaluate. They include patents, copyright, goodwill, and the popularity of a trademark or company name.

Some companies add another classification called other assets in their balance sheets. These refer to assets that cannot be classified under the main classifications of assets, or acquisitions that do not conform with the usual transactions of the company. Some companies also put a separate classification for short-term investments in their balance sheets.

2. Liabilities are the obligations of the company to creditors for past transactions such as acquisition of raw materials and other debts. Liabilities are classified as either current or long-term liabilities. Current Liabilities are usually due within one year while long-term liabilities have a prescribed period of more than a year. Several accounts are placed under current or long-term liabilities depending on the duration of the obligation.

a. Notes payable- it is the amount of loans due based on a written agreement or promise to pay. A bank loan is an example of notes payable. This is a long-term liability.

b. Accounts payable- it refers to the obligations of the company to the suppliers without a written promissory noteand are classified as current liability.

c. SSS/Philhealth payable- this is the current liability that is specific to the Philippines. It is the amount of contributions from the company and its employees that have not been remitted to SSS and PhiliHealth.

There are other accounts classified as current liability such as salaries and wages payable and interest payable. Salaries payable is the amount due to the employees but are not yet given as of the date of the balance sheet. Interest payable is the amount of the company owes from proceeds of a loan that is due as of the date of the balance sheet.

3. Owner's equity or stockholder's equity- shows the amount of the owners business have invested.

a. Common stock- this represents ownership of the corporation. Possession of common stock in a company enables stockholders to elect the board of directors, which is the governing body of the corporation, and share in the profits of the firm in the form of dividends.

b. Preferred stock- this is a special class of stock whose holders are given preference in the distribution of dividends before the common stockholders.

c. Retained earnings-this is the net income of the corporation less dividends.

In the actual balance sheet, assets are listed on one side, while the liabilities and owner's equity are listed on the other. Ideally, the sum of both sides should be identical so that the sections are "balanced". The balance sheet is an important tool in determining the financial standing of the company in terms of comparing the company's assets against its liabilities. The standard formula for determining the financial status of a company using a balance sheet is

ASSETS = LIABILITIES + OWNER'S EQUITY

Income Statement

- reports profits earned or losses incurred by the company over a given period. The interval is specified in its heading such as "For the Month Ended, January 31, 1015"; "For the Three Months Ended, March 31, 2015" (which means from January 1 to March 31, 2015); or "For the Year Ended December 31, 2015".

1. Revenue this is the income from primary activities such as production and selling of goods on the part of the manufacturer. Sales revenue refers to revenue gained from the sale of goods by retailers, distributors, manufacturers, and wholesalers. Other revenue comes from secondary activities unrelated to the main business like rent from an idle warehouse or garage.

2. Expenses these are costs incurred in the operation of the business such as salaries and wages of employees; utilities like electricity, water, and telephone; sales commissions, and expenses in advertising and promotions.

3. Net Income the income statement lists the revenue and expenses incurred by the company, and the total expenses is subtracted from the total revenues. The resulting amount is the net income and may be expressed as a profit or loss. A profit indicates that expenses are less than the income or total revenue at a given period. if the expenses are greater than revenue, the company has incurred a loss. The standard formula for net income is Net Income = Revenues - Expenses.