The accumulated basis as a way to record financial movements

In the past, economic activities were only for self-consumption, that is, they only used the resources they obtained from the land for the service of their home, even without being able to exchange for economic resources that could be more useful or better to say that it would help them to satisfy other needs that with the production that they obtained from their lands they did not cover; even so, with the self-consumption they already had a control to be able to manage their harvests for the determined time that the producer planned. At that time I must imagine that there was no record of entries and exits of the products, but there was already a record of the amount of their production in order to have a control and arrive smoothly at the next season of the year.

Economic problems have always existed so there has been a need to account for production or economic resources, therefore accounting is a technique that has been useful from our past.

The accounting record is like a system that we can use from to control our personal income to a large company, so why will it be more important to just consume and produce and not have a record or have an accounting record even if there is a little production?

Well, in relation to this question, you should always have an accounting record to facilitate control and have better optimization of the resources obtained or those that have accrued, so the most appropriate thing is to have a good accounting record and also a good one. production either for these times in which we live or that was also the best option for times past.

Returning to the economic life of times past after self-consumption came the exchange of goods which is called "barter", here already most of the people already saw to satisfy other needs with self-consumption they could not cover, because of this the market system begins, which makes it more mandatory to record financial movements; Already merchants and changers relied on having control of their finances.

La base acumulada es una forma de registrar los movimientos financieros, ya con el transcurso del tiempo se ha perfeccionado la manera de registrar los movimientos financieros. En la actualidad existen dos tipos de registros contable, la más útil para la información financiera es la contabilidad sobre base acumulada, la cual es el tipo de registro más adecuada para poder dar un mejor información financiera cuando hablamos de empresas chicas y grandes. En relación a las personas que sólo son comerciantes ambulantes o informales, es decir, personas de pequeño contribuyente registran sus movimientos de sus negocios con la contabilidad sobre efectivo.

Today the two types of accumulated basis and cash registers are used to record financial movements for all types of businesses, whether small or large, for profit or non-profit. As we mentioned before, small taxpayers, if they have sales movements or credit purchases, it is important that they also use accounting on a cumulative basis to have better control of their business and thus not only record cash inflows and outflows.

The accounting record is simply the entries made in the accounting books that are used to make the financial statements, which are the following:

Statements of income Balance sheet Statements of changes in equity Statements of change in financial position Statements of cash flows

All of these help us to capture all the information that is needed in a company, whether it is profitable or not, to obtain financial information and thus know the situation of said company so as to make it known to general users as regulated by NIF A -3, which is important for each stakeholder to know what situation they are in. For you, why do you think it is important to give financial information to general users? The general user has the right to have that information. A general user is anyone who is in the company X circle, for example: suppliers, workers, various debtors, etc., each one has different needs in relation to company information.So it is important that they are informed to know their situation in that company and thus make decisions to continue or not to be enrolled in it.

Let's talk about accrual basis accounting, it is the register with which one really obtains the net profits of a business, it is the most feasible to achieve more efficiency to make the financial statements. Why is the recording method with which you can obtain real financial information?

Accumulated basis accounting records all movements at the time the financial operation is performed, even if this movement is virtually, that is, there is no direct entry or exit of cash. We can interpret it in the best way if we observe all the movements that exist in the day. If you realize that most of the sales in a department store are on credit, this is a clear example of the accounting records on a cumulative basis because the record is made at the time of the merchandise delivery even if there is no entry of cash.

There are many examples that we can give in relation to this type of record, for example, all records that talk about purchases, sales on credit, records of amortizations, to say some financial movements in a company.

Example:

In the company "MARY´S" Boutique there are 20 months without interest when buying $ 1,000.00 of women's clothing. A client bought $ 5,000.00 on credit. What will the accounting record be like?

1.- 5,000.00 is charged to customers and 5,000.00 is paid to sales. To take out the gross profit, the charge must be recorded at cost of sales $ 3,000.00 and warehouse bonus $ 3,000.00. In order to obtain the net profit, the charge in general expenses must be recorded $ 500.00 and $ 500.00 must be paid to the cash register.

Customers ……………… 5,000.00 Sales …………………………… 5,000.00 Cost of sales …… 3,000.00 Warehouse. ……………………..3,000.00 General expenses …… 500.00 Box ………… ………………… 500.00

This example that I give is the type of record on the accumulated basis, if you realize they are records that must be made to really obtain the net profit from sales, since this is the objective of this type of record, this results in greater efficiency to make financial reports.

“Cash basis accounting recognizes income when a cash inflow occurs and expenses are recorded at the time there is a cash outflow, that is, the recording is carried out at the time a change in the effective ”(Guajardo Cantú, 2004: 78)

In reference, we can say that this type of record on a cumulative basis is the most efficient, although today cash accounting is equally important for reporting cash inflows and outflows and also for tax requirements.

“Accrual or accrual basis accounting recognizes income when the sale is generated, whether or not there is cash or some other good. Likewise, expenses are recorded when they are incurred, whether or not there is an outflow of cash or some other asset. In short, income and expenses are recorded when they are earned or incurred, not when they are received or paid "(Guajardo Cantú, 2004: 79)

It is what we have been explaining that the accumulated base records do not need the entry of cash, that is why I have given the examples of credit sales is what this type of record is based on.

The difference between the accumulated base and the cash base is simply the recording of financial movements, in relation to whether there is cash inflow or not. the accumulated base records all movements regardless of whether there is cash inflow or not.

Cash accounting only records the movements of a company if they are cash inflows and outflows, that is, even when movements are made directly in the bank and cash account.

In all times, accounting records have been of great importance for such reason that there has always been a market system. From our past antecedents, the control of financial movements has been improved and with financial reporting standards, a framework of standards has been provided for the best use of financial statements.