WHAT IS ACCOUNTING?
WHAT IS ACCOUNTING?
Accounting..
• Is an art
• Is the language of business and finance
• Is the science of recording and classifying business transactions
and events, primarily of a financial character, and the art of
making significant summaries, analysis and interpretations of
those transactions and events and communicating the results to
persons who must make decisions or form judgement.
THE ACCOUNTING SYSTEM
• The accounting system is a method of recording and reporting the
financial results of its business transactions. The bookkeeper
records the business transactions of the cooperative in a daily
journal. These records are then used to generate various financial
reports that provide an historical record of the cooperatives'
business activity
ACCOUNTING AND
BOOKKEEPING
Accounting – is an art of recording, classifying , summarizing in
a significant manner and in terms of money, transaction and
events which are in part, at least, of a financial character and
interpreting the results thereof.
Bookkeeping – is the systematic recording of financial
transactions and events in chronological order.
ACCOUNTING EQUATION
ASSET = LIABILITIES + EQUITY
ASSET – a present economic resource controlled by the entity as a
result of past event. An economic resource is a right that has the
potential to produce economic benefits.
LIABILITIES – is present obligation of an entity arising from past
transaction or event, the settlement of which is expected to result
in an outflow from the entity of resources embodying economic
benefits.
EQUITY – Is the residual interest in the assets of the entity after
deducting all of its liabilities.
COOPERATIVE VS CORPORATION
WHAT IS A COOPERATIVE?
• According to Article 3 of the Republic Act No. 9520 (RA 9520), a
cooperative is an autonomous and duly registered association of
persons, with a common bond of interest, who have voluntarily
joined together to achieve their social, economic, and cultural
needs and aspirations by making equitable contributions to the
capital required, patronizing their products and services and
accepting a fair share of the risks and benefits of the undertaking in
accordance with universally accepted cooperative principles.
WHAT IS A CORPORATION?
• A corporation (under sec. 1 of the revised corporation code) is an
artificial being created by operation of law, having the right of
succession and the powers, attributes, and properties expressly
authorized by law or incidental to its existence.
COOPERATIVE PRINCIPLES
Every Cooperative shall conduct it’s affairs in accordance with the Filipino culture
good values and experience and the universally accepted principles of cooperation
which include, but are not limited to, the following;
1. Voluntary and Open Membership – are voluntary organizations, open to all
persons able to use their services and willing to accept the responsibilities of
membership, without gender, social, racial, cultural, political or religious
discrimination.
2. Democrative Member Control – are democratic organizations that are controlled
by their members who actively participate in settings their policies and making
decisions. In Primary cooperatives, members have equal voting rights of one-
member, one-vote. Cooperatives at other levels are organized in the same
democratic manner.
3. Member Economic Participation – Members contribute equitably to, and
democratically control, the capital of their cooperatives.
COOPERATIVE PRINCIPLES
4. Autonomy and Independence – Cooperatives are autonomous, self-help
organizations controlled by their member. If they enter into agreements with
other organizations, including government, or raise capital from external
sources, they shall do so on terms that ensure democratic control of their
members and maintain their cooperative autonomy.
5. Education, Training and Information – Cooperatives shall provide education
and training for their members, elected and appointed representatives,
managers, and employees, so that they can contribute effectively and
efficiently to the development of their cooperatives.
6. Cooperation Among Cooperatives – serve their members most effectively
and strengthen the cooperative movement by working together through local,
national, regional and international structures.
7. Concern for Community – Cooperatives work for the sustainable development
of their communities through policies approved by their members.
CHARACTERISTICS OF COOPERATIVE SIMILAR TO
CORPORATIONS
1. Liability: A cooperative duly registered shall have limited liability.
2. Separate personality: A cooperative can be likened to a corporation with a
personality separate and distinct from its owner-members
3. Term: for a period not exceeding 50 years from the date of registration;
may be extended for periods not exceeding 50 years, but no extension can
be made earlier than 5 years prior to the original or subsequent expiry
date/dates unless there are justifiable reasons.
Note, however, that is no longer a similarity since corporation now, generally
has perpetual existence under the revised Corporation Code.
CATEGORY OF COOPERATIVES
• Cooperative shall be categorized according to membership and
territorial consideration. In terms of membership, cooperatives shall
be categorized into:
• Primary-the members of which are natural persons.
• Secondary-the members of which are primaries.
• Tertiary-the members of which are secondary cooperatives.
• Thus, those with cooperative memberships are considered
federations or unions as the case may be. In terms of territory,
cooperatives shall be categorized according to areas of operation
which may or may not coincide with the political subdivisions of the
country. Those organized by minors shall be considered a laboratory
cooperative and must be affiliated with a registered cooperative. It is
governed by special guidelines promulgated by the CDA.
Some Example of Types Cooperatives:
Other Agri Cooperative
Education Cooperative
COOPERATIVE BANK
Multipurpose Cooperative Credit Cooperative
ORGANIZATION, REGISTRATION AND REORGANIZATION
REQUIREMENTS FOR REGISTRATION
1. Articles of Cooperation
2. A sworn statement of the treasurer elected by the subscribers
3. By-laws
4. Bonds of the accountable officers
5. General statement describing the structure which shall include bookkeeper
and purposes of the proposed cooperative
6. Economic Survey
ECONOMIC SURVEY
Every group of individuals or cooperative intending to form a cooperative shall
submit to the CDA a general statement describing among other the structure
and pruposes of the propsed cooperative; provided, that the structure and
actual staffing pattern of the cooperative shall include a bookkeeper; provided
further, that the shall not be allowed to operate without the necessary
personnel and shall also submit an economic survey, indicating therein:
1. Area of operation;
2. Size of members; and
3. Other pertinent date in a format provided by the CDA (Art. 11)
ORGANIZING A PRIMARY COOPERATIVE
REQUIREMENTS: would require 15 or more natural persons who are
1. Filipino citizens
2. Of legal age
3. Having a common bond of interest; and
4. Are actually residing or working in the intended area of operation.
A prospective member of a primary cooperative must have completed a Pre-
Membership Education Seminar (PMES)
ORGANIZING A CORPORATION
REQUIREMENTS: would require not more than 15
1. Must own or subscribe to at least one share.
2. Of Legal age
3. Natural person/ Juridical persons
Note this is just a general requirements of organizing a corporations items are
still subject for verification under the revised corporation code if requirements
are not meet.
MINIMUM SUBSCRIPTION AND PAID-UP CAPITAL REQUIREMENT
Similar to corporation, in organizing a cooperative, 25% of the Authorized
Capital Share must be subscribed, and at least 25% of the Subscribed Capital
must be paid-up.
However, unlike corporations, the minimum of paid-up capital requirement for
a cooperative is P15,000.00
Preferred Share Capital: Not subject to the minimum subscription requirement.
Should preferred share capital be provided in the by-laws, it shall not exceed
25% of the total authorized share capital of the cooperative. No fractional
shares shall be issued for both the common and preferred share capital
COOPERATIVE ORGANIZATIONAL STRUCTURE
MEMORANDUM CIRCULAR NO. 2011‐07
CORPORATION ORGANIZATIONAL STRUCTURE
COOPERATIVE VS CORPORATION
ABC COOPERATIVE ABC CORPORATION
COOPERATIVE VS CORPORATION
COOPERATIVE VS CORPORATION
ABC COOPERATIVE ABC CORPORATION
COOPERATIVE VS CORPORATION
ABC COOPERATIVE
COOPERATIVE VS CORPORATION
ABC CORPORATION
COOPERATIVE VS CORPORATION
COOPERATIVE VS CORPORATION
COOPERATIVE CORPORATION
Run and Owned by it’s Owned by Shareholders
Members
Non-Profit For Profit
Mainly to provide Services Mainly to make money from
serivices
THANK YOU!
