1.- GENERAL CONCEPTS
Considering that Accounting is a technique that aims to support and optimize the processes of Administration and Economics in a business organization, its teaching requires clearly defined and practical objectives, feasible to apply with exact precision.
basic-accounting-manualIt is for this reason, that this Manual, pretending to provide basic accounting content, will focus its teaching on the didactic material and student participation in the development of situations and practical cases that must be solved, which will logically be coordinated with the contents expressed. in the study program presented above.
A brief overview of the Objectives, function and purpose of Accounting will be presented in it, and then take a brief step through the commercial and banking documentation that are the documents that record the historical economic events that occurred in the company and that are consolidated as the base of the accounting records elaborated later in the accounting systems that the institution will keep.
Next, the Accounting Concepts and their essential operations will be delivered, finally developing records of basic accounting processes that lead to the preparation, analysis and interpretation of final Financial Statements, such as the Income Statements of a company.
DEFINITION
ACCOUNTING is an auxiliary technique of the Economy, whose purpose is to support the processes in the Administration of a company in order to contribute efficiency. The information provided serves the Executives to guide Decision Making regarding the future of the organization.
It is the art of registering, classifying and synthesizing in a meaningful way, expressing them in money the acts and operations that have even partially financial characteristics and of interpreting their results.
FUNCTIONS
Historical, it is manifested by the chronological record of the economic events that appear in the life of the company. Example: The annotation in order of dates of all the collections and payments that are made.
Statistics, is the reflection of the economic facts in quantities that give a real vision of the way in which the situation of the company is affected. Ejm: See the growth of the company in five years.
Economic, studies the process that is followed to obtain the product. Example: Cost - benefit.
Financial, analyzes the obtaining of resources, to face the commitments of the company. Example: See what money the company has, know the terms of collections from clients and payment commitments to creditors.
Tax, is to know how the tax provisions affect you, to know all the existing taxes Eg: VAT, Income, Single Tax, etc.
Legal, know the articles of the commercial code, labor code and other laws that may affect the company so that the accounting legally reflects the content of the activity Eg: Health, AFP, etc.
OBJECTIVE
- Provide a numerical image of what actually happens in the life and activity of the company, know the Heritage and its modifications Provide a basis in figures to guide management actions in their decision-making Provide the justification of the correct management of the company's resources.
ACCOUNTING AS A SYSTEM
Within the macro-system "company" there are a variety of Administrative Information Subsystems, among which we find the Subsystem of
Accounting Information.
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Data collection: Invoices, C / vta. Notes, Debt Notes, Credit Notes, Deposits, checks, Bills, Income, Purchase and Receipts. Discharge. |
Analysis and Classification of Operations carried out.
Record of Operations Preparation of Financial Statements ( Balance Sheet, This Results) Accounting Information Analysis |
Delivery Balance Sheet, Income Statements and Statement of Change in Financial Position. |
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Company Workers Management level Operative Level With the purpose of projecting the development of the organization. Union Directives |
- Internal Tax Service - Superintendency of Banks - Superintendency of Securities and Insurance (controls Public Limited Companies) - Creditors, Shareholders, etc. |
CHARACTERISTICS OF THE ACCOUNTING INFORMATION
| 1. Exact
Respond accurately to the data recorded in the original documents (invoices, checks, and others) |
2. True and reliable
The records and reports must express the real situation of the facts. |
| 3. Clara
The information must be presented in such a way that its content is not misleading and understood by the common members of the company. |
4. Referred to a level
Prepared according to the recipient. |
| 5. Economic
With a lower cost than the benefit it reports. |
6. Timely
Make it available at the time your information is required. |
ACCOUNTING PRINCIPLES
In order for the financial statements to be understood by third parties, it is necessary that they be prepared subject to a body of rules or conventions previously known and generally accepted.
The principles are few and far between and represent the basic assumptions on which the standards rest. They necessarily derive from the economic and political factors of the environment, from the ways of thinking and customs of all segments of the community that involve the business world.
The General Acceptance Accounting Principles are summarized below, which are determined by the characteristics of the environment in which accounting is carried out.
1.- Equity: Equity between opposing interests should be a constant concern in accounting, since those who use, or use accounting data, may find themselves faced with the fact that their particular interests are in conflict. It follows that financial statements should be prepared in such a way as to fairly reflect the various interests at stake in an entity. This principle in the background is the basic postulate or fundamental principle to which the rest is subordinate .
2.- Accounting Entity: The financial statements refer to specific economic entities, which are different from the owner or owners thereof.
3.- Going Company: It is presumed that there is no time limit on the operational continuity of the economic entity and therefore, the figures presented are not reflected at their estimated realization values. In cases where there is well-founded evidence proving the opposite, this fact and its effect on the financial situation must be recorded.
4.- Economic Assets: The financial statements refer to economic events, resources and obligations that can be valued in monetary terms.
5.- Currency: Accounting measures in monetary terms, which allows reducing all its heterogeneous components to a common denominator.
6.- Period of Time: The financial statements summarize the information related to specific periods of time, which are made up of the normal cycle of operations of the entity, due to legal or other requirements.
7.- Accrued: The determination of the operating results and the financial position must take into consideration all the resources and obligations of the period, whether or not they have been received or paid, in order that in this way the costs and expenses may be duly related to the respective income they generate.
8.- Realization: The economic results should only be computed when they are carried out, that is, when the operation that originates them is perfected from the point of view of the applicable legislation or commercial practices and all the risks inherent to such operation have been properly weighed. It should be established in a general way that the concept "carried out" participates in the concept of accrued.
9.- Historical Cost: The registration of operations is based on historical costs (production, acquisition or exchange); Unless, to agree with other principles, the application of a different criterion (realization value) is justified. The corrections of the fluctuations in the value of the currency do not constitute alterations to this principle, but less adjustments to the numerary expression of the respective costs.
10.- Objectivity: Changes in assets, liabilities and equity must be accounted for as soon as it is possible to measure these changes objectively.
11.- Prudential Criterion: The measurement of resources and obligations in accounting requires that estimates be incorporated for the purposes of distributing costs, expenses and income between relatively short periods of time and between various activities. The preparation of financial statements, therefore, requires that sound judgment be applied in the selection of the basis to be used to achieve a prudent decision. This implies that before two or more alternatives, the most conservative one must be chosen. This criterion should not be affected by the presumption that the financial statements could be prepared based on a series of inflexible rules. In any case, the criteria adopted must be sufficiently verifiable to allow an understanding of the reasoning that was applied.
12.- Significance or Relative Importance: When considering the correct application of the principles and norms, they must necessarily act with practical sense. Frequently situations arise that do not fit with the applicable principles and standards and that, however, do not present problems because the effect they produce does not distort the financial statements considered as a whole. Of course, there is no demarcation line that sets the limits of what is and is not significant, and the best criteria must be applied to resolve what corresponds in each case according to the circumstances, taking into account factors such as the relative effect in assets, liabilities, equity, or in the results of operations for the accounting year.
13.- Uniformity: The quantification procedures used must be uniformly applied from one period to another. When there are well-founded reasons to change procedures, this fact and its effect must be reported.
14.- Background Content About Form: Accounting places emphasis on the economic content of events even though the legislation may require a different treatment.
15.- Economic Duality: The accounting structure rests on this premise (double entry) and is made up of: a) resources available for the achievement of the objectives established as a goal and b) their sources, which are also demonstrative of the various liabilities incurred.
16.- Fundamental Relationship of the Financial Statements: The results of the accounting process are fully reported through a statement of financial position and by a statement of income accounts, both of which are necessarily complementary to each other.
17.- General Objectives of Financial Information: Financial information is basically intended to serve the common needs of all users. Users are also presumed to be familiar with operational practices, accounting language, and the nature of the information presented.
18.- Exposure: The financial statements must contain all the basic and additional information and discrimination that is necessary for an adequate interpretation of the financial situation and the economic results referred to above.
Next, and as a complement to the manual, a video course that will introduce you to accounting knowledge, there are 23 lessons (4 hours) in which you will learn about the principle of double entry, the equity equation, the accounts, their accounting and classification, among other topics.
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