What is accounting?
The word comes from " accounting ", ie counter issues , person holding books calculations on a trade or small business , banks and others.
In addition: Cost accounting .
Types of accounting
The accounting is classified according to the item where it is used:
Business accounting: It includes calculations of costs, expenses, income , production of the year, expenses or extraordinary income (fiscal, operating, financial sanctions, losses and gains by exchange rate).
Financial accounting : Includes the gross export surplus, added value, commercial margin, self-financing capacity, resources, assets, liabilities , amortization, solvency of the company, financial ratios, factors of production and the exploitation cycle.
Bank Accounting : For the management of different business funds, loans, securities, bonds , different types of currencies. They also work with econometric models that establish market variables, because of the foregoing, rigorous accounting controls are made to avoid errors.
Matrix accounting : It is one that uses matrices to facilitate more simply in rows and columns of must and have in their books.
Cost accounting : Can be linked to business and / or financial accounting covers all internal company, materials, salaries , facilities and serves to makeproduction data , investment salaries, purchase of goods, social charges, financial expenses, amortizations and provisions of the current year. On the other hand, it includes what refers to subsidies, turnover, rent of borrowed capital, obligations on other companies. This leads to a result of profit or losses, the net result of the company.
National accounting : It refers to the accounting of the so-called "State budget". It is extremely important for a nation its economic declaration and requires preparation, discussion and approval of the legislative power. And then, an execution. In this case, the control is governed by a court of accounts where every year budgetary balances, financing of public expenditure, direct and indirect taxes, tax revenues, such as VAT (value added tax) are given. This concept is related to the "trade balance" that is similar to the state budget.
Planning accounting : It is the one that tends to see the possible positive changes within the company and in the medium that it is positioned. In addition, it is responsible for seeing the future expansion way. His topics to be discussed are: sales planning, optimization, new resources, marketing , costs of the same. It also focuses on following the production numbers, making a cost plan, a supply plan, the possibility of expanding the margin and internal financing plan and for consumption incentive. This implies the search for greater effectiveness, including creativity , new ideas to be implemented.
What is cost accounting?
Cost accounting gives us real and concrete information of all the costs and expenses that a company has to produce . Establishing the cost of a product serves to have control over the production, the sale of the product, the administration and the financing thereof.The cost is the value paid for obtaining goods or services . The cost causes a reduction of assets. The costs of a company are related to the activities that are carried out daily.
When performing a cost accounting, the administrative and managerial work is evaluated . It is always necessary to compare the income of the company and the costs that have previously projected.
Also: What is accounting?
What should accounting for costs take into account?
cost accounting
The cost is the monetary value of the raw material and labor.
A company needs to take certain aspects into account when accounting for costs . First, the product and its elements, the volume and production, the tasks performed, the period of time , and so on.
As for the products, the materials or resources used in their production must be taken into account , directly and indirectly, the labor (that is, the effort of the employees, both physical and mental) and the manufacturing costs.
With regard to the activities carried out around the production of a product , manufacturing is taken into account , that is, production, the market (promotion and sale of the product), administrative costs ( salaries , etc.) and financial costs .
For example, if a product has a cost of materials of a certain value, to that must be added the salary of the employees that produce them, what is spent on the distribution and advertising , taxes, and so on.
You have to differentiate what are the costs of the expenses . The cost is the monetary value of the raw material and labor . Expenditure corresponds to the time of production, distribution and administration of the company, such as the payment of wages.
Why is cost accounting important?
Knowing in detail the production costs allow a greater control of operations. Cost accounting offers the company all the information it needs to make timely and correct decisions based on real and concrete information.
This information is useful to develop new projects and evaluate the activities carried out within the company. As we said at the beginning of this article, knowing the cost of a product helps us to have control over the production, the sale of the product, the administration and the financing of it.
Accounting always has the objective to provide useful data to managers of a company or organization to make decisions correctly in the economic area. The data obtained are recorded in accounting documents that show the economic situation of the company in question. In general, cost accounting looks for short-term objectives so that the company obtains benefits and not losses.
In addition, the company will know exactly how much to sell the product according to the total expenses of the same, which exceeds the raw material, since labor and administration are taken into account. The company thus finds a state of balance between revenue and costs , and thus may take decisions, which ultimately is the primary objective of a business.
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