FUNDAMENTALS OF

ACCOUNTING THEORY AND

PRACTICE 1B
ABE INTERNATIONAL COLLEGE OF BUSINESS AND ECONOMICS
2ND TRIMESTER
A.Y. 2023-2024
 REVIEW OF THE BASIC
ACCOUNTING CONCPET AND
PRINCIPLES
PART I
LEARNING OUTCOMES

• Recall the definition of accounting and numerate the different phases of

accounting
• Enumerate the accounting elements and the account titles under them.
• Recall the normal balances of each account
• Remember the T-Account and the rules of debit and credit
• Recall the Accounting Equation
• Recall and performer the different steps in the accounting cycle.
 WHAT IS ACCOUNTING?

• Is a service. Its function is to provide quantitative information

primarily financial in nature
• Is an information system that measures, process and communicates
financial information about economic entity
• Is the process of identifying, measuring and communicating
economic information to permit informed judgement and decision
by users of the information.
 PHASES OF ACCOUNTING

• RECORDING – recording transactions in journals

• CLASSIFYING – refers to sorting and group. We used ledger as
company’s book
• SUMMARIZING – preparation of Trial Balance and Financial Statement.
• INTERPRETING – analyzing the financial data regarding the profitability
and financial condition of the business.
ACCOUNTING ELEMENTS

• 1. ASSETS – right or properties, tangible or intangible owned by the

business
• 2. LIABILITIES – debts or obligation of the business to its creditor
• 3. CAPITAL – equity or right of the owner over the asset of the business
 ACCOUNT TITLES AND EACH ELEMENTS

• Chart of Accounts includes the account number corresponding account

title and account description.
• Normal Balance pertains to the account’s amount or balance position
in the accounting equation or in T-Accounts.
• The normal balance of an account is usually on its increase side in T-
Accounts.
NORMAL BALANCES

• ASSET accounts – normal balance is debit

• LIABILITIES accounts – normal balance is credit
• CAPITAL accounts – normal balance is credit
RULES OF DEBIT CREDIT

• ASSET = + debit - credit

• LIABILITIES = + credit - debit
• CAPITAL
• REVENUE = +credit - debit
• EXPENSE = + debit - credit
CLASSIFICATION OF ACCOUNTS

• NOMINAL or TEMPORARY ACCOUNTS

• - Found in the incomes statement
• REAL or PERMANENT ACCOUNTS
• - found in the balance sheet
ACCOUNTING EQUATION

• 1. DEBIT = CREDIT
• 2. ASSET = LIABILITIES + CAPTIAL
• 3. ASSET = LIABILITIES + CAPITAL – DRAWING + REVENUE –
EXPENSES
INTRODUCTION TO
PARTNERSHIP
PART II
LEARNING OUTCOMES

• State and explain the definition of partnership

• Enumerate and understand the characteristics of partnership
• Understand the advantages and disadvantages of partnership
• Describe a partnership contract and its contents
• Enumerate and define the classification of partnerships
• Enumerate and define the kinds of partners
 WHAT IS PARTNERSHIP?

• Is one of the forms of business entities

• More complex as compared to sole proprietorship
• Complexities capital requirement and contribution, sharing of
profits and losses, the dissolution process.
 ART. 1787 OF RA 386

• Partnership defined as by the contract of partnership, two or

more person bind themselves to contribute money, property,
or industry to a common fund, with the intention of dividing
the profits among themselves. Two or more persons may also
form a partnership for the exercise of a profession.
 CHARACTERISTICS OF PARTNERSHIP

• 1. Separate legal personality – Has a juridical personality and distinct from each
of the partners.
• 2. Limited life – if one or more of the partners withdraws from the partnership,
the old partnership will be dissolve and new partnership might be created to
continue the same business.
• Mutual agency – each partner can act as an agent of the partnership within the
regular partnership business operation.
• 4. Unlimited Liability – each partner, except limited partner is
individually or personally liable to the partnership obligations debt
in the event that a partnership can no longer pays its obligation with
the business assets. Creditors may run after the personal asset o the
general partners.
5. Co-ownership of properties and division of profits. All the assets
invested by all partners and those acquired or owned the partnership
belongs to the partnership. Profits are shared by the partners
depending on their agreement. In the absence of any agreement on
how the profits and the loses will be divided, it will be shared in the
ratio of their contribution to the partnership. Industrial partners do not
share in the losses of the partnership
 ADVANTAGES OF PARTNERSHIP

• 1. Compare to a sole proprietorship, capital is bigger as it can raise more capital

because of the two or more persons performing it.

• It has a better management partners bring together their expertise

• Compared to a corporation, its easier and less expensive to form or organize

• Less legal requirement of the government as compared to corporation. It can be

organized for the practice of professions like CPA, lawyers etc.
 DISADVANTAGES OF PARTNERSHIP

• The possibility that disputes and misunderstanding may arise among partners.

• Unlimited Liability of general partners will result to their personal obligation to the
partnership debts.

• Limited life of the partnership as compared to a corporation. Corporation may have a

maximum life of 50 years and renewable.

• The transfer of interest of a partner requires the consent of all partners.

• Compared to a corporation, a partnership has a smaller capital.

ARTICLES OF PARTNERSHIP

• 1. The name of the partnership and the partners forming it

• 2. The purpose
• 3. Location of the business
• 4. Date of the scope of the operation.
• 5. Date of its formation and terms of existence
• 6. Contribution to be made by every partner and the capital credits given to
them
• 7. The books of accounts to be used by the partnership and how
will they are kept.
• 8. The methods on how the profit and losses will be shared by the
partners and the special compensation that might be given to
partners for service to be rendered,
• 9. Rights, power, roles, responsibilities and obligation of each
partner
• 10. Issues on additional investment that a partner will put into the
partnership, and limitation on withdrawals that a partner can make.
• 11. Arbitration of misunderstanding and disputes among partner
• 12. Provisions, in case of the dissolution of the partnership.
• 13. The methods that will be used in determining the value of the business
in case of sale, death, disability or withdrawal partner and dissolution.
CLASSIFICATION OF PARTNERSHIP

• 1. Universal and particular partnership – partners agree to bring

into the partnership their whole property.
• Two Kinds:
UNIVERSAL PARTNERSHIP OF ALL PRESENT
PROPERTIES – whole property of a partner in the time of the formation
of the partnership becomes common property for all partners as well as
the profits that can be derived from them.
• UNIVERSAL PARTNERSHIP OF PROFITS – once which states that only
property acquired through work and services of the partners during the
existence of the business become a common fund of the partnership. The
property of each of the partners at the time of the contract shall be owned by
each of them.

2. Particular partnership is one where the partners unite to have a single

individual transaction or business and divide the profits among themselves.
 CLASSIFICATION OF PARTNERSHIP

• GENERAL AND LIMITED

• General partnership is the basic form of partnership. Each partner is called
general partner in an owner of the firm sharing all the privileges, profit, losses and
risk of the business.
• Limited Partnership is a partnership composed of at least two kinds of partners: a
general and limited. The general partner will the majority of risk of the business
especially when it goes bankrupt. The limited partner are so called because their
personal obligations liabilities of the partnership is up to the extent of their capital
contribution.
 KINDS OF PARTNERS

• 1. GENERAL PARTNER – Liabilities is unlimited

• 2. LIMITED PARTNER – partnership debts is limited to the extent of his
capital contribution.
• 3. CAPITALIST PARTNER – one who contributed money or property to the
common fund
• 4. INDUSTRIAL PARTNER – one who contribute his industry of service only
to the partnership. He shared in the profits of the partnership but not in the
losses.
• 5. SILENT PARTNER – one who is known publicly as a partner but
does not participate in running the affairs of the partnership
• 6. DORMANT PARTNER – one who is not known as a partner and
does not participate in the running of the partnership.
• 7. SECRET PARTNER – one not known as a partner but actively
participates in managing the partnership
• 8. NOMINAL PARTNER – a partner who contributes nothing to the partnership
but allows his name to be used by the firm.

• 9. CAPITALIST-INDUSTRIAL PARTNER – one who contribute money or

property and services to the partnership.

• 10. OSTENSIBLE PARTNER – one whose name appears in the firm name and
known publicly as a partner.
 ACCOUNTING FOR
PARTNERSHIP
OPERATIONS
PART III
LEARNING OUTCOMES

• Understand additional feature of partnership such as plurality of capital

and drawing accounts and profits/losses sharing of the partners
• Account and record the partner contribution to the partnership
• Understand and apply the different ways of forming a partnership
• Learn the different method of dividing the partnership profits and losses
• Understand and accounts for partners’ drawing account.
 PLURALITY OF CAPITAL ACCOUNTS AND
DRAWING ACCOUNT

• Each partner’s capital account will be credited for their initial investment or
contribution
• Debited for the withdrawal of cash and other assets made by each partner,
and for his share in the losses
 PLURALITY OF CAPITAL ACCOUNTS AND
DRAWING ACCOUNT

• PARTNERS’ LOAN TO THE PARTNERSHIP

- there are some cases where a partner lends money to the partnership,
and this is credited to LOAN PAYABLE or NOTE PAYABLE of the business.
-in cases where a partner paid the loan to the partnership, a DEBIT to
LOANS RECEIVABLE or NOTES RECEIVABLE will be made.
 • SALARIES OF PARTNERS
- Partners may allocate allowances or salaries to themselves but
this is not true business expenditures. This is usually methods
of dividing profits
• PROVISION FOR INTEREST ON INVESTMENT
-this is also a way of sharing profits among partners. Interest can
be based on initial capital contribution, average capital, beginning
capital, ending capital balances.
• PROFITS AND LOSSES SHARING
- if there is no agreement, it is fair to divide profits based on their
capital contributions.
WAYS OF PERFORMING A PARTNERSHIP
• 1. Two or more persons may organize a partnership to
operate a business for the first time, contributing
- cash only
- cash and other property
- cash, property and insdutry
WAYS OF PERFORMING A PARTNERSHIP
• 2. Two or more persons to form a partnership whereby
one or both of them are already in business and
a. New set of books will be opened for the
partnership
b. Either one of the books of the existing business
will be used as the partnership books
WAYS OF PERFORMING A PARTNERSHIP
• 3. Admitting a new partner in an existing partnership by
a. The new or incoming partner will purchase an
interest from one or more partner of the old or current partners.
b. The incoming partner to purchase the interest of
one or all the old partners by investing in the partnership.
 DIVISION OF PARTNERSHIP’S PROFIT AND
LOSSES
• 1. Sharing equally
• 2. Sharing be based on some arbitrary ratios or stated fraction
• 3. Sharing based on capital contributions
• 4. A certain percentages of interest is allowed on capital balances and the remaining
profits based on agreement
• 5. Salaries allowed to partners and the remaining balances on agreed ratios
• 6. Interest on capital, salary allowances to partners and the remainder on agreed ratios.
 PARTNERS’ DRAWING ACCOUNT

• Partners also need cash for personal use expenses just like sole proprietor.
• Withdrawal of cash or non-cash assets is also allowed by the partnership.
• Recording drawing is made by debiting drawing account and crediting cash or
any other assets
• There are business that closes the balance of income Summary to the Drawing
Account and then, the balance or Drawing Account will be closed to Capital
Accounts.
 PARTNERSHIP
DISSOLUTION AND
LIQUIDATION
PART IV
LEARNING OUTCOMES

• Define dissolution, liquidation or termination, winding up of the

partnership
• Distinguish between dissolution and liquidation
• Enumerate and understand the different causes of dissolution and
termination of a partnership
• Accounts for dissolution and liquidation of partnership
 TERMINOLOGIES

• LIQUIDATION – ending or closing the partnership

• REALIZATION OF ASSETS – selling for non-cash
assets for a gain or loss
 DISSOLUTION OF A PARTNERSHIP

• Is the change in relation of the partners caused by any partner ceasing to be

associated in the operation as distinguished from the winding up of the
business.
• The time when the partners stop to operate the business together
 PARTNERSHIP LIQUIDATION

• Is the process of putting an end to the partnership and distributing its assets
• Termination is the point in time when all the partnership affairs are wound
up.
• Winding up – is the process of clearing all the affairs of the partnership after
dissolution
A PARTNERSHIP MAY BE DISSOLVED WITHOUT
TERMINATING IT BUT LIQUIDATION IS ALWAYS HEADED BY
DISSOLUTION
 CAUSES OF DISSOLUTION

• Admission of a new partner in an existing partnership

• Withdrawal or retirement of a partner
• Death of a partner
• Incorporation of a partnership
- similar to selling partnership to a corporation
 LIQUIDATION

• -is a process of bringing a business to an end and distributing its assets to claimants
• The process of closing the partnership and distributing its assets
• Outcomes of dissolution
• Reason for liquidation:
- Bankruptcy
- Wish to start a new business
- Settle accounts with partnership creditors
 STEPS IN LIQUIDATION OF A PARTNERSHIP

• 1. Sell of non-cash assets or realization of assets

• 2.. Division or distribution of gain or loss
• 3. Payment of obligation
- Preferred creditors
- Secured Creditors
- Unsecured Creditors
• 4. Payments to partners or return of the excess money to the partners
 INTRODUCTION TO
CORPORATION
PART V
 LEARNING OUTCOMES
• Define corporation and understand its attributes
• Enumerate and understand the characteristics or a corporation
• Understand the advantages and disadvantages and its comparison with partnership
• Enumerate and define the classes of corporation
• Identify the components of a corporation
• Learn the steps in the formation of corporation
• Enumerate the concept of the articles of corporation and by-laws of the corporation
• Enumerate the basic rights of a shareholder
• Define important terminologies used for corporate accounting only.
SECTION 2 OF THE CORPORATION CODE

- A corporation is an artificial being, created by

operation of law, having the rights of succession
and the power, attributes, and properties expressly
authorized by law or incident to its existence.
SECTION 2 OF THE CORPORATION CODE

- Is an artificial being-the law has given its rights,

power and liabilities which are almost the same as
a natural person.
- Can act only through its board of directors
SECTION 2 OF THE CORPORATION CODE

- It has the rights of succession – corporation may

continue its operations notwithstanding the death,
insolvency, or incapacity of the board of directors,
officers, employees
CHARACTERISTICS OF A CORPORATION
- Separate legal entity
- Continuous life and ownership
- No mutual agency
- Limited Shareholders liability
- Ownership and management are separated
- Corporate taxation (double taxation)
- Government Regulation
ADVANTAGES OF FORMING CORPORATION

- Limited Liability
- Greater Source of Capital
- Ownership transfer
- Perpetual like
- Pass through-profits and losses are passed though shareholders
DISADVANTAGES OF A CORPORATION

- Double taxation
- Excessive tax filings, substantial amount of paperwork
- Independent management – the management team of a
corporation can operate the business without any real
oversight from the owners.
CLASSIFICATION OF CORPORATION

1. STOCK CORPORATION – are corporation with

their share capital or capitals stock dividend into
shares of stock. The shareholder of which are
entitled to receive dividends or share in the
corporate earnings.
CLASSIFICATION OF CORPORATION

2. NON-STOCK CORPORATION – are

corporations that do not issue shares of stock.
Ex. Labor organization, social charitable, civic and
professional organizations
 ACTIVITY 1

•The class will be divided into three (3)

groups and will be task to find the
remaining classification of corporation.
COMPONENTS OF A CORPORATION

• Incorporators – are the shareholders or members

who originally formed the corporation and are the
signatories in the articles of the incorporation
registered with the Securities and Exchange
Commission.
COMPONENTS OF A CORPORATION

• Corporators – are the persons who composed the corporation

including the incorporators, shareholders or members.
• Shareholders are the corporators of a stock corporation
• Members are those who compose the non-stock corporation.
STEPS IN THE FORMATION OF CORPORATION

• Five or more persons, but not exceeding 15 must prepare an

application for a charter (Articles of Incorporation) Sign, and file
it with the SEC
• A sworn affidavit by the organization’s treasurer stating that at
least 25% of the entire number of authorized share of capital
stock has been subscribed and that 25% of the total subscription
has been paid, either in cash or property of equal value.
STEPS IN THE FORMATION OF CORPORATION

• Filing fees has to be paid with the SEC

• If the Sec required, the application should be published in national
newspaper
• The certificate of incorporation will be handed by SEC
commissioner to the applicants once it is approved.
• The shareholder will meet to accept the charter and adopt the by-
laws
ARTICLES OF INCORPORATION

1. Name of the Corporation

2. The purpose of the Corporation
3. The place of the principal office of the corporation (within
the Philippine)
4. Term of existence of the corporation
5. The name, nationalities, and residence of the incorporators
ARTICLES OF INCORPORATION

6. Number of the director or trustees not less than five but not more than
fifteen
7. The name of the person who shall act as director until the first regular
directors are duly elected and qualified base on the code
8. If the company is stock corporation, the amount of authorized share
capital in lawful money of the Philippine, the number of shares into which
it is dividend, the par value per share, the names, nationalities and
addresses of the original subscribers and the amount subscribed and paid.
 BY-LAWS OF A CORPORATION

A corporation, within a month after receiving the

certificate of incorporation by the SEC, should adopt a
code of by-laws for its government and should be
consistent and continuing rules of action for the
government of a corporation and the people composing it.
 RIGHTS OF THE SHAREHOLDERS

• Unless regulated in the Articles of Incorporation, each of

stock permits the holder of the following rights:
• 1. Rights to vote in the meetings of the shareholders.
• 2. Rights to share in the income or earning of the corporation
• 3. Rights to share in the assets of the corporation after all its
obligations are settled.
 TERMINOLOGIES OF CORPORATE ACCOUNTING

• Stockholder’s Equity – used the owner’s equity of a corporation

• Capital stock or share capital – sometimes called Authorized
Capital Stock, is the Capital of the corporation. It is the amount
prescribe by the charter or to be subscribed and be paid in by
the shareholders of the corporation.
• Share of Stock – is the basic unit of stock or unit of ownership
in a corporation.
 TERMINOLOGIES OF CORPORATE ACCOUNTING

• Stock Certificate – is the evidence of ownership of share

to a shareholder for its fully paid investment.
• Common stock – is a kind of stock representing
ownership in a corporation where the holders exercise
control by electing board or directors and vote on
company policies.
 TERMINOLOGIES OF CORPORATE ACCOUNTING

• Preferred Stock – is a kind of ownership in a corporation that has

special privileges on dividends and asset over the common stock.
• Treasury Stock – is the legally issues, fully paid and later on
reacquired by the issuing corporation.
• Dividends – is the distribution of the earnings of a corporation to
its shareholders.
 ACCOUNTING FOR
MANUFACTURING
OPERATIONS
PART IV
 LEARNING OUTCOMES
• Describe the nature of manufacturing type of business
• Enumerate and define manufacturing cost
• Enumerate and define non-manufacturing cost
• Enumerate and define the categories of manufacturing cost
• Enumerate and define the kinds of inventories of a manufacturing business
• Learn to record the specific manufacturing expenses
• Prepare financial statement for a manufacturing type of business.
 INTRODUCTION

• The accounting process for a manufacturing type of

business is similar with the merchandising and service
type of business. There will only be a additional
transactions and additional accounts to be used, longer
financial statement and additional computations.
 TERMINOLOGIES

• Cost of Goods manufactured – total cost incurred for the

finished goods completed during the period.
• Manufacturing cost – cost of producing a finished goods
• Non-manufacturing cost –is a cost incurred outside the
creation of a finished product.
NATURE OF MANUFACTURING OPERATIONS

• Manufaturing refers to the production or creation of a

product. Manufacture came form the Latin word
“manufacere” which means “make by hand”, manu-hands,
facere – make.
• Raw material + Labor + Overhead = Finished Product
 MANUFACTURING COSTS

• Direct Materials – materials are consumed in producing a

product.
• Direct Labor – Labor cost associated with the process of
producing the finished goods
• Manufacturing Overhead or factory overhead. These are the
cost other than direct material and labor. Indirectly associated
with the product
 NON-MANUFACTURING COSTS

• Expenses incurred outside production:

1. - Selling Expenses or Distribution Expenses
2. General Expenses (Administrative)
CATEGORIES OF MANUFACTURING COSTS

• Product Cost – all cost incurred to create finished goods

• -direct material
• direct labor
• factory overhead
CATEGORIES OF MANUFACTURING COSTS

• Inventory Cost – cost of a product or assigned to finished goods.

• Prime Cost – are the direct cost in producing a product
• -direct materials
• -direct labor
• Conversion Cost – Transform raw materials into finished goods
• Direct Labor
• MOH
 KINDS OF INVENTORIES

• Raw Materials – unused direct materials

• Work-in-Process – works or goods still in process

• Finished Goods – completely manufactured and ready for sale

 RECORDING SPECIFIC MANUFACTURING
TRANSACTIONS

• Purchase of Raw Materials

• Raw Materials Purchase xx,xxx
• Cash or Accounts Payable xx,xxx

• Payment of Freight for raw materials

• -Frieght in xx,xxx
• Cash xx,xxx
Activity 2.

A clothing manufacturing company sold 1,000 totaling 1,000,000 pesos

during the month of December . The clothes materials used for such sold clothes
amounting to 30,000, labor cost 50,000 and overhead cost of 100,000. The wages
paid to the office employees amounted to 50,000, utilities paid 20,000 and the
store rent of selling clothes is 10,000. The total contribution margin cost
amounting to 100,000. How much is the net income (loss) of the clothing
company? Requirement:
1. Compute the Sales Revenue.
2. What is the Gross profit?
3. What is the net income?
4. What is net loss?
Sales Revenue 1,000,000 (answer no. 1)
Cost of Good Sold
Material 30,000
Labor 50,000
Overhead 100,00 (180,000)
Gross Profit 820,000 (answer no.
2)
Operating Expense
Salaries 50,000
Utilities 20,000
Rent 10,000 (80,000)
Net Profit 740,000
(answer no. 3)

Net Loss = 0 (answer no. 4)

 ACCOUNTING FOR
MERCHANDISING
OPERATIONS
PART V
 LEARNING OUTCOMES

• Define merchandising
• Understand the additional account title and terminologies for
merchandising
• Understand the operating cycle of a merchandising business
• Understand the two inventory system and how to record
transaction under each system
 MERCHANDISING

• Merchandising also called Trading, is a form of business

operation involving the purchase and buying of goods or
merchandise and selling in its original form.
• Others called, buy and sell business
 Comparison between
merchandising, service type and
manufacturing type
of business
COMPARING THE THREE BUSINESS ACTIVITIES

• 1. Service business rendered services to other to earn revenue while

merchandising business buys merchandise and sell the same, changing
nothing but the price.
• 2. Merchandising firm purchases their products/merchandise to sold as
is while manufacturing company purchases raw materials, convert then
to finished goods or goods which they will sell.
• 3. The output of a manufacturing firm is the merchandise that a trader
or manufacturer will but and sell.
ADDITIONAL TERMINOLOGIES AND ACCOUNTS
TITLES FOR MERCHANDISING

• Sales refer to the revenue of a merchandiser earned by

selling goods or merchandise inventory.
• Net Sales – pertain to the excess of Sales over sales
discount and sales returns and allowance granted by the
selling to its customer.
ADDITIONAL TERMINOLOGIES AND ACCOUNTS
TITLES FOR MERCHANDISING

• Sales Discount – is the amount deducted from accounts

receivables from customers for paying promptly their
accounts. This is a contra account of Sales
• Sales Return and Allowances – also contra account of
Sales, pertain to the decrease in receivables form a
customer for returning merchandise .
ADDITIONAL TERMINOLOGIES AND ACCOUNTS
TITLES FOR MERCHANDISING

• Trade Discount – refers to direct reduction in selling price

of s good or merchandising to encourage customer to but.
This is not recorded in the books.
• Cost of Good Sold – is the cost of the merchandise
inventory that the merchandiser has sold. This is also
termed Cost of Sales
ADDITIONAL TERMINOLOGIES AND ACCOUNTS
TITLES FOR MERCHANDISING

• Gross Profit – is the excess of total sales over the cost of

good sold
• Purchase return and allowances – refers to the merchandise
bought and returned by the merchandiser to the supplier or an
amount given by the supplier as a deduction form the total
purchases of the buyer. This is a contra account of Purchases .
ADDITIONAL TERMINOLOGIES AND ACCOUNTS
TITLES FOR MERCHANDISING

• Purchase Discount – is the amount deducted form the trade

payable of a buyer to his supplier of goods because of paying
on their agreed time. Also a contra account of purchase.
• Freight –in or Transportation – is the cost of transporting the
merchandise form the supplier to the buyer or merchandiser.
 THE INVENTORY SYSTEMS

• The purpose of inventory is to trace or determine the quantity

of goods that are still available for sale.

• TWO INVENTORY SYSTEM

1. Periodic Inventory system
2. Perpetual Inventory System.
PERIODIC & PERPETUAL INVENTORY SYSTEM

• The periodic inventory system uses an occasional physical

count to measure the level of inventory and the cost of
goods sold. The perpetual system keeps track of inventory
balances continuously, with updates made automatically
whenever a product is received or sold.