ACCOUNTING FOR COOPERATIVE SOCIETIES.pdf - ACCOUNTING FOR CO-OPERATIVE SOCIETIES Definitions-It is a legal entity owned and controlled by its members

ACCOUNTING FOR COOPERATIVE SOCIETIES.pdf - ACCOUNTING FOR...

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1 @Kiphill & Ass ACCOUNTING FOR CO-OPERATIVE SOCIETIES Definitions: -It is a legal entity owned and controlled by its members. The defining point in a cooperative is that the members have a close association with the cooperative as producers or consumers of its products or services, or as its employees. -It may also be defined as a business owned by the people who use its services. It is a business voluntarily organized operating at cost which is owned, capitalized, controlled by members as users sharing risks and benefits proportional to their participation or patronage. Co-operative identity - They are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. - Co-operative members believe in ethical values of honesty, openness and caring for others. Membership is open, meaning that anyone who satisfies certain non-discriminatory conditions may join. - They are however, governed by a strict one member, one v ote’ basis, to avoid the concentration of control in the elite. - Economic benefits are distributed proportionally according to each members level of economic interest in the co-operative, for instance by a dividend on sales or purchase. - Co-operatives may be generally classified as either consumer or producer co-operatives, depending largely on the mutual interest and their membership shares. Classification is also often based on their function. Why co-operatives are organized (objectives) i. Improve organizing power: combining volume of several members leverages their position when dealing with other businesses. ii. Reduces costs : volume purchasing reduces the purchase price of needed supplies. Earnings of the cooperative returned to individual members lower their nets costs. iii. Obtain market access or broaden market opportunities : value is added to products by processing or offering larger quantities of an assured type and quality to attract more buyers.
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  • Spring '16
  • Accounting, Cooperative, cooperative society, economic report, Accounting For Cooperatives

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