accounting
it is the art of registering, classifying and summarizing in a meaningful way and in terms of money, operations and events that are at least of a financial nature, as well as interpreting their results "
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The goal of accounting is to provide information to the owners and partners of a business about what is owed and owed. It can be split in managment and financial goal. **
- purpose of accounting *
examine, classify and record, report, interpret
Balance accounts
The administrative objective ** is to provide information to administrators so that they plan, make decisions and control operations and the financial objective is to provide information on the operations carried out by an entity, mainly in the past.
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asset, liability, capital
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active: These are the resources that the company or a person has. They are those that are counted on to produce.
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ACTIVE
** CLASSIFIED
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Current Assets
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They are the assets that can be converted into money more easily. The most circulating of assets is money itself.
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Fixed Assets
CLASSIFIED IN
Bank
Commodity
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They are the assets that are acquired in order to use them and not to sell them or convert them into money.
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THEY ARE CLASSIFIED IN
Machinery
Land
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Deferred assets
Buildings
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CAPITAL
Furniture and equipment
Documents receivable
PASSIVE
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They are the debts and obligations of the company
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Credit increases Debt decreases
Debt decrease, Credit increase
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ARE CLASSIFIED
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Current liabilities
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fixed liabilities
They are all debts that can be paid in less than a year. Examples: accounts payable, social security payable, loans payable, interest payable, mortgages payable, and so on.
Deferred liabilities
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They are all long-term debts (more than one year). For example: mortgages, long-term loans, etc. They are considered fixed liabilities because we will have them “fixed” in our reports for more than one year.
They are items collected in advance and that have to be earned for the future supply of services or delivery of merchandise. For example, if you rent a space and they pay you 3 months in advance, that money is something that you have but have not yet earned it completely: it is a deferred liability. Now you have a debt or obligation to your client to provide the service even if you do not want to.
A company can be
Single owner
Anonymous society
Another type
Decrease due to debit, Increase due to credit
accounting cycle
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Transaction recording in the journal.
Majorization of accounts
Preparation of a trial balance
Preparation of financial statements
Cast crew
Box
They are expenses paid in advance. For example: if you pay for an insurance policy in advance, rent in advance, advertisements paid in advance, and so on.