Every business sells goods or services to customers and should be paid for what it sells. Every business buys goods and services from suppliers, and must pay for what buys
For example, retail businesses such as department stores and supermarkets buy goods from suppliers for resale to shoppers, and a garage buys car parts and components to repair customers cars. Businesses buy stationery and computers for their office work.
All businesses incur expenses for various services, such as the supply of electricity. telephone services, property rental costs and local taxation (business rates). Many businesses have employees, and have to pay for their labour in the form of wages and salaries.
In this publication, the term business is used to refer to an organisation or entity which undertakes trading activities, irrespective of the legal structure or characteristics of that business. The ACCA FA1 syllabus does not require any knowledge of different business structures such as a partnership or limited liability company. The focus is upon sole proprietors - individuals who both own and manage the business.