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ROLE AND ACCOUNTING - Coggle Diagram

- - - - If there is an efficient accounting system, the administrators and investors of a certain company can obtain at any time information such as: capital structure, composition, sales, inventories, etc. In order to carry out the financial analyzes necessary to make decisions in favor of your interests.
        Although most companies have satisfactory accounting systems, many are deficient due in part to ineffective accounting procedures.
        
        Accounting Cycle Steps
        As we explained earlier, the life of a business or a company is divided into accounting periods, and each period is a recurring accounting cycle, beginning with the recording of transactions in the journal and ending with the post-closing trial balance.
        To more accurately and fully understand all the components of the accounting cycle, each step needs to be understood and visualized in its relationship to the others.
        
        The steps, in the order in which they are presented, are as follows:
        1.- General Balance at the beginning of the reported period: It consists of the beginning of the accounting cycle with the balances of the accounts of the trial balance and the general ledger of the previous period.
        2.- Process of analysis of the transactions and recording in the journal: It consists of the analysis of each one of the transactions to proceed with their recording in the journal.
        3.- Transfer from the journal to the ledger: It consists of registering in the ledger accounts the charges and credits of the entries recorded in the journal.
        
        Objective of Accounting Accounting is expected to provide useful information for decision making and control. From this arise its main objectives:
        
        Provide information: the information is oriented towards decision-making, both internally and to third parties related to it.
        
        Be useful as a means of control: this objective is mainly related to the comparison of the results obtained with those planned, and the prevention and evidence of errors, fraud or omissions.
        
        Give legal protection: since the Commercial Code grants probative value to the annotations that are made in the books as long as they fall within the current regulations.
- - - - The partnership contract
        Although a partnership can be formed by verbal agreement, it is highly advisable to find a partnership agreement in writing, outlining aspects of the mutual understanding of the partners on things such as:
        
        Name of the partners and duties and rights of each one.
        
        Value of the contributions of each partner including the valuation procedure of any non-cash asset invested or withdrawn by the partners.
        
        Methods of distribution of profits and losses.
        
        Withdrawals allowed to each partner.
        
        Accounting of the partnership.
        
        The accounting of a partnership is the same as that of a sole proprietorship, except that it maintains separate capital and withdrawal accounts for each of the partners.
        A distinctive feature of accounting for a partnership is that the net profit of the business is divided among the partners as stipulated in the partnership agreement.
        
        Formation of a Public Limited Company or Joint Stock Company
        A corporation is created under the constitution of a document issued by the state. Once the constitutional document has been approved by the entity in charge, the shareholders of the new company meet in turn and elect the directors and other employees of the company.
        
        Cost of organization The costs necessary for the formation of a limited company include payment to the state of function rights, payment of legal fees to lawyers for their service in relation to the statutes, pay promoters and a variety of other additional expenses to bring the company into existence.
        
        Shareholders' rights
        
        Functions of the Board of Directors.
        
        The Cooperatives
        Definition: A cooperative is a group of people with some common economic and physical needs that come together for the purpose of providing service as a medium and the community that surrounds them.
        Importance of Cooperatives The importance of cooperatives lies in the fact that through the application of a true cooperative system with all its established rules, norms, procedures and principles, it will indisputably be a tool for economic, social and intellectual development.
- - - - For internal administration purposes, an income statement under the contribution margin approach is preferable.
        The traditional method is the one studied in financial accounting courses that focus on reports for internal use.
        This method does not apply the concept of variability of expenses. On the other hand, an income statement formulated under the contribution margin approach emphasizes the variability of expenses, due to its relevance in the responsibilities of the planning and control administrative function.
- - - - The income statement reflects the income and expenses incurred during an accounting period and is prepared based on the information recorded in the income and expense accounts.
        These accounts must begin each new accounting period with a zero balance if the end-of-period balances are to accurately reflect the income and expenses for that period.