Michael Pokrovski
التحكم
انضم: 2022-07-25 11:51:03
2023-12-05 20:57:54

Accounting is an orderly system for collecting , registering and summarizing information in monetary terms about the state of propertyliabilities and capital of an organization and their changes through a continuous, continuous and documentary reflection of all business transactions. Accounting is closely related to tax and management accounting.

Internal users of financial statements are managers, founders, participants and owners of the organization’s property. External users of financial statements are investorscreditors, and the state. Accounting differs from statistics by the subject of observation: the owner of the funds (in the case of accounting) or a third party (in the case of statistics). A specialist who carries out accounting is called an accountant.

Objects and subjects of accounting

The objects of accounting are the property of organizations, their obligations and business transactions carried out by organizations in the course of their activities . The subject of accounting is the facts of economic life.

Accounting in accordance with the accounting law can be carried out:

  • accounting department included in the enterprise; chief accountant hired by the enterprise under an employment contract;
  • head of the organization; general director in the absence of an accountant;
  • an accountant who is not the chief accountant;
  • third party organization (accounting support).

Tasks

The main task of accounting is the formation of complete and reliable information (accounting statements) about the activities of the organization and its property status, on the basis of which it becomes possible:

  • prevention of negative results of the organization’s economic activities;
  • identification of internal reserves to ensure the financial stability of the organization;
  • monitoring compliance with legislation when the organization carries out business operations;
  • control of the feasibility of business operations;
  • control of the availability and movement of property and liabilities;
  • control over the use of material, labor and financial resources;
  • monitoring compliance of activities with approved norms, standards and estimates.

Objectives of accounting

  1. Ensuring the safety of valuables.
  2. Identification of the results of economic activities.

History

Antiquity

The rudiments of accounting were practiced in all civilizations of the irrigation type. The first known examples of this kind are clay tablets from the period of the Babylonian Kingdom. The same type of primitive accounting includes, for example, the quipu, the knotted writing system of the Incas.

In ancient Rome, private enterprises used the "Adversaria" (journal) and the "Liber rationis" (account book), otherwise called the "Codices accepti et depensi" (book of receipts and issues). In the first of them, all sorts of operations were noted as they were performed, and in the second they were classified into categories. In addition to these books, money changers and bankers also used the book “Kalendarium” to indicate the terms of loans. There was also a book "Patrimoniorum" designed to record income from land and livestock. The responsibility of keeping accounts was assigned to the ratiocinator, or accountant, and the logographer, or bookkeeper.

The traditions of Roman accounting continued to be preserved. The growth of accuracy and legal validity of accounting records was facilitated by the concept of Roman law and the emergence of trade (economic) law.

In the second millennium, merchants began to create mediation courts. They developed certain requirements for records: chronological order of records, no gaps in the accounting books between records, each operation is documented, etc.

In the Middle Ages, two main areas of accounting were formed: desk and simple accounting.

The office proceeded from the fact that the main object of accounting was the cash register, expected receipts, as well as payments from it: the main goal was to avoid cash gaps. All receipts and payments of funds were subject to registration, and income and expenses were established in advance.

Simple accounting involved accounting for property, including the cash register, and income and expenses became required by the accountant. All property accounts were maintained on the debit-credit principle, but equity accounts had not yet been included in the information accounting system.

New time

  • Double entry accounting was first introduced into commercial practice in Venice at the end of the 13th century. A systematic presentation of accounting using the double entry method was given in the classic work of the Italian mathematician L. Pacioli in 1494: the article “Treatise on Accounts and Records” was included in the preface to the encyclopedia of mathematics (Italian:  Summa de arithmetica, geometria, proportioni et proportionalità).
  • In the 18th century, Barrem's rules of debit and credit were formulated. In 1840, Vanier put forward the principle that accounting is conducted on behalf of the company, and not its owner .

Accounting method

The accounting method is a set of all techniques and methods by which accounting reflects the movement and state of economic assets and their sources, includes the following main elements:

  • documentation
  • evaluation
  • accounting system
  • double entry
  • inventory
  • calculation
  • preparation of balance sheets and reporting.

Accounting principles

Accounting principles are the basic, initial, basic provisions of accounting as a science, which predetermine all subsequent statements arising from them. The following can be considered the basic principles of accounting:

  • The principle of autonomy (property separation) assumes that a particular organization exists as a single independent legal entity; its property is strictly separated from the property of its co-owners, employees and other organizations. Accounting data represents a unified system that meets the objectives of property management, obligations and business transactions carried out by the organization in the process of its operation. Accounting elements that do not have an impact on business processes are removed from the accounting system as unnecessary. Accounting and balance sheets reflect only property that is recognized as the property of this particular organization.
  • The principle of double entry is a double continuous reflection of economic phenomena, facts and transactions, predetermined by the use of double entry in accounts, that is, simultaneously and for the same amount in the debit of one account and the credit of another account.
  • The principle of a functioning organization assumes that the organization functions normally and will maintain its position in the market in the foreseeable future, paying off obligations to suppliers and consumers and other partners in the prescribed manner. This principle necessitates linking the organization's assets with its future profit, which can be obtained with the help of these assets. This principle acquires particular importance when assessing the property and liabilities of an organization.
  • The principle of objectivity is that all business transactions must be reflected in accounting records, be registered throughout all stages of accounting, and be confirmed by supporting documents on the basis of which accounting records are maintained.
  • The principle of prudence presupposes a certain degree of caution in the process of forming judgments necessary when making calculations made under conditions of uncertainty, avoiding overstatement of assets or income, and understatement of liabilities or expenses. Compliance with the principle of prudence prevents the occurrence of hidden reserves and excessive inventories, the deliberate understatement of assets or income, or the deliberate overstatement of liabilities or expenses. Neglect of this principle will lead to the fact that financial statements will cease to be neutral and, therefore, will lose reliability.
  • The accrual principle  - all transactions are recorded as they occur, and not at the time of payment, and relate to the reporting period when the transaction was completed. This principle can be roughly divided into:
    • the principle of recording income (revenue)  - income is reflected in the period when it is received, and not when payment is made. International standards allow recording of sales by shipment, delivery, receipt of money by the seller or agent;
    • principle of correspondence  - income of the reporting period must be correlated with the expenses through which these incomes were received. Of course, expenses (income) related to the corresponding income (expenses) recognized in another reporting period are accounted for separately.
  • The principle of periodicity is aimed at regular, periodically repeated balance sheet summarization - drawing up balance sheets and reporting for the year, half a year, quarter, month. This principle ensures the comparability of reporting data and makes it possible to calculate financial results after certain periods of time .
  • The principle of monetary measurement , that is, the quantitative measurement and calculation of facts of economic activity and production processes; The unit of measurement is the country's currency.
  • The principle of continuity (consistency, constancy) assumes that the accounting methods adopted by the enterprise will be applied consistently from year to year.

Accounting paradoxes

  1. There is no money, but there is profit: the presence of profit according to accounting data may not be accompanied by the simultaneous availability of cash from the organization.
  2. There is money, but no profit: the presence of cash in an organization may be accompanied by a simultaneous lack of profit (the presence of losses in the balance sheet).
  3. The property mass has increased, but profit has not: an increase in the organization’s property may not be correlated with an increase in the organization’s profit.
  4. The property mass has increased and profits have increased: the costs of acquiring property can be accompanied by a simultaneous increase in profits.
  5. The property mass has decreased, but the profit has not changed: a decrease in the organization’s property may not in any way affect the results of financial activities.
  6. The property mass has decreased and profits have decreased: a decrease in the organization’s property may be accompanied by a simultaneous deterioration in financial results.

Accounting outsourcing

Accounting outsourcing is a special case of business process outsourcing and one of the ways to provide accounting support for the activities of an enterprise. It involves transferring functions related to the organization, accounting and reporting at the enterprise outside the company, transferring them to an outsourcer for execution . With accounting outsourcing, an external company is included in the working business processes of the customer company as an integral functional unit, while remaining organizationally and legally independent. Foreign experts in the field of outsourcing note that along with the transfer of certain financial functions, which are often performed by the outsourcer on a daily basis, management of these functions and processes is usually also transferred.

Unlike accounting services, which are often episodic in nature, accounting outsourcing is a long-term strategy that entails a major restructuring of business processes within the company. Another common form of accounting support at an enterprise is the involvement of a freelance accountant, which cannot be classified as accounting outsourcing, since the service provider in this case is an individual and objectively cannot have its own infrastructure necessary to ensure and support business interaction processes, and is also deprived of a number of other capabilities of a specialized company. The American Management Association showed that by that time 1/5 of the surveyed firms had outsourced at least some of their financial and accounting operations, and 4/5 of the firms had outsourced some of their administrative functions.

Protective function of accounting

The protective function of accounting is understood as ensuring the protection of the property interests of participants in economic activity, namely:

  • owners (participants, shareholders) of the enterprise;
  • employees of the enterprise;
  • states.

There are two components of the protective function of accounting:

  • precautionary (preventative);
  • protective (trace-forming).

The warning (preventive) function is aimed at making it difficult for one person or another to commit violations by implementing ongoing control. That is, the accounting system itself is built in such a way that all actions of persons involved in business transactions are as transparent as possible; known to a large circle of people; subject to immediate control; interconnected with the actions of other persons.

The protective (trace-forming) function is triggered after a violation has been committed. It is ensured by the ability of the accounting system to adequately reflect the facts of destructive deviations in economic activities against the will of attackers. That is, despite the efforts of persons interested in hiding information about the violations being committed, with competent accounting, traces remain in the accounting documents that make it possible to identify such facts.

The protective function is implemented through a system of subsequent financial control:

  • in a planned manner,
  • when information about illegal actions arises.

Accounting in banks

Bank accounting  is an orderly system for collecting and summarizing information about the property and obligations of a credit organization, its financial and business operations. Accounting in a commercial bank has a number of significant features - both in the nature of the operations reflected in the accounting records, and in the organization of accounting work, and in the form and content of accounting and reporting documentation, and, of course, in the main accounting entries.

Banking accounting is characterized by efficiency and unity of the form of construction. This is manifested in the fact that all settlementcredit and other transactions performed in the bank during operating hours are reflected on the same day in the personal accounts of analytical accounting of clients and are controlled by drawing up the daily balance sheet of the bank. A uniform accounting form for all banks creates the opportunity to analyze banking activities. The clarity and efficiency of banking accounting allows for control over the safety of fundscash flow and the state of settlement and credit relations.

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