Fundamentals of accounting in the enterprise

Accounting is a continuous and continuous recording of its activities of the organization on the basis of primary documents and registration of economic processes in monetary terms. All objects of accounting are conditionally divided into two parts: assets (funds that belong to the enterprise) and liabilities (sources of these funds). Knowledge of the chart of accounts is the basis of accounting. All transactions are reflected in the accounting entries. So the acquisition of fixed assets, the receipt of money on the settlement account is reflected in the debit, that is, there is an increase in assets. The decrease in assets is shown on the credit of the accounts. The increase in liabilities is reflected in the loan, and the decrease is reflected in the debit.

All postings are compiled on the basis of instructions from the Ministry of Finance and the Tax Service and only if there are primary documents (invoices, contracts, invoices). Understand the basics of accounting is necessary for the daily work of all financiers. When creating postings, it is important to logically take into account that the increase in the organization's (assets) funds should be put on a debit, and their decrease - on a loan. An increase in the sources of enterprise funds (liabilities) is put on a loan, and a decrease in sources is debited.

Basics of accounting are two principles:

1. The principle of balance

The principle of accounting balance is based on the formula:

ASSETS = OBLIGATORY + OWN CAPITAL

ASSETS are everything that an enterprise has and uses to make a profit.

COMMITMENTS are all that an enterprise owes to outside investors, suppliers, state organizations and the budget.

OWN CAPITAL - this is the part that remains when deducting liabilities from assets Thus it is shown that LIABILITIES are repaid first of all when liquidating or closing an enterprise, and each owner can dispose of his own capital in the last turn.

1. The principle of double recording

All financial transactions have credit, but the principle of balance should always be respected. For example, you have 100,000 rubles, and you need to purchase equipment for 300,000, then you take a loan in the bank for the missing amount.

A (100,000) = O + SC (100,000)

In accounting, this transaction is made on a debit to the cashier-200,000 rubles and on a loan to the bank - 200,000 rubles.

A (100000 + 200000) = O (200000) + SC (100000) Thus, the principle of balance is preserved.

Any financial statements are provided for information of external users of the enterprise. Banks and suppliers learn how the company is creditworthy, investors want to know how profitable the enterprise is, and the state uses reporting to collect taxes to the budget. Compilation of financial statements by the accountant for standard forms helps the manager to manage the enterprise and also represents the basis of accounting. The most important forms of financial reporting are balance sheet, balance sheet, cash flow statement, profit and loss account.

Special mention should be made of expenses in accounting. Costs are primarily a reduction in economic benefits in a given period, as a result of an outflow of assets or an increase in liabilities, which leads to a decrease in capital.

The accountant should not confuse costs and expenses in accounting and always understand their differences while working and be able to competently defend the point of view before the audit bodies. Costs never reduce OWN CAPITAL as opposed to expenses. The costs of the enterprise are a certain period, then these costs turn into ASSETS or expenses. Costs depend on costs and always affect the profit of the enterprise. But the costs themselves do not affect the profit.

I will show you by examples: Repayment of accounts payable leads to a decrease in ASSETS (money paid), but at the same time decreased and liabilities (debt repaid), therefore, OWN CAPITAL has not changed. Therefore, it is wrong to consider this a cost.

Write-off of accounts receivable after the expiry of the limitation period of three years is a cost, since there is a decrease in ASSETS without changing the LIABILITIES, therefore, OWN CAPITAL decreases. Likewise, it can be recognized as the expense of a negative exchange rate difference or the recognition of fines, penalties, state duty.

The costs of leasing property are the expense at the end of the period, the cost of production, which is closed and not yielded profit, can also be considered a cost.

That's all the fundamentals of accounting, based on logic, and not on special instructions, manuals, regulations and other regulatory documents. In accounting, you need to think logically, and not just blindly follow the requirements.