Accounting and finance guide

Accounting the ability of a person or group of people to perform work related to mathematical calculations , statistics, graphs, numerical records in order to order, establish all the movements of a company or trade.

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.

Concept Of Passive Accounting

1. What is the liability?

2. Classification of liabilities

• Required liabilities . It covers the total of debts, documented or not, that the person or company has with third parties, a product of external financing. Said liabilities involve short or long-term obligations (classified as short or long-term liabilities, therefore), depending on the stipulated date of cancellation of the debt, that is, the moment in which payment is required.
• Liability not due . This concept would cover the total of the reserves and own funds of a company that can not be disposed of when belonging to the shareholders, but that can not be demanded by them either. However, many accountants do not agree with the existence of this.
• Contingent liability . An obligation arising from past events, which may or may not materialize in the future depending on certain conditions, and which may or may not become a specific obligation to pay.

3. Relationship between assets, liabilities and equity

• The asset is the set of assets owned, as well as their rights of use and transformation, capital, debts receivable. They are the destination (the use) of the financial means and the economic structure of the company.
• The liabilities and net assets are the sources of financing, external and internal, respectively, that is used to start a project. They are the source (origin) of the financial means, and they make up the financial structure of the company.

• Asset = Liability + Net Equity
• Net Equity = Assets - Liabilities

1. What is income?

• Public income . Those that receive the State or its different dependencies from taxes and other collection mechanisms.
• Private income . Those that concern private companies or private groups, whether or not they are for profit.
• Ordinary income . Those that are obtained in a customary manner, that is, habitual, such as salaries and regular payments.
• Extraordinary income . Those that come from unforeseen or unexpected events or events, such as issuing government bonds or winning the lottery.
• Income s  Total is . The sum of what is perceived by an organization or a company due to its regular commercial activity, that is, when selling all its products or services.
• Marginal revenue . In microeconomics , it is called the increase of the total sale of a sector, when a unit is positioned more than expected.
• Average income . An indicator obtained from the average of the products sold, that is, the total income among the total units sold.

2. Income in accounting

3. Income in economy

4. Income and expenses

5. Income per capita

1. What is Heritage?

• Expand: What is equity in accounting?

2. Heritage in Law

• Set of rights and obligations.  These two elements act unitarily, that is, they can not be separated from each other.
• Monetary value.  The elements mentioned in the previous point must be subject to a value that can be expressed in the currency of use.
• Title.  In order for these rights and obligations to be valid, the title that proves or credits them must exist. In the case in which the subject who owns the estate is a creditor must prove it, in case of debtor there must be another subject that demonstrates the debt that the former has to him.

3. Characteristics of the Heritage

• The assets refer to the rights and assets that the subject owns, whether real or credit.
• The liabilities refer to the debts, charges and obligations of the subject.

• Indivisibility.  that is to say that a single person can be the possessor of a certain patrimony.
• Intransmissibility  that is, that the patrimony can not be inherited if the person who owns it has not yet died. When the individual has died his ownership over the patrimony is extinguished, being able in this way to inherit his descendants.
• Impossibility of embargo  in this case, when the right to inherit has not yet been acquired, the good, meanwhile, can not be seized.

1. What is Inventory?

• The initial inventory, then you begin to place the valuation of the goods you have when the accounting period begins.
• The purchases represent the merchandise acquired by the company in order to market it.
• Returns and purchase expenses.
• The sales are the transfer, in this case, of a good to another person after the payment of a price already agreed.
• Sales returns
• Goods in transit (are those that are on track to reach the company but have not arrived yet).
• Goods on consignment that do not belong to the company, and finally
• The final inventory, which is an analysis comparison of the goods at the beginning of the period and at the end of it, where yields results profits and losses registered.

2. Types of inventories

Credit Line In accounting

1. What is a line of credit?

2. Differences between line of credit and loan

• Delivery of money . In the majority of the loans the applicant is given a certain amount or requested at the same moment of his request, under the commitment of payment of the amount requested plus interest and commissions, according to a period and a periodicity of payment. In the line of credit, however, a maximum limit of money is established and the applicant is provided whatever he or she wishes (below the cap, obvious) and interest and commissions are charged only for the amount withdrawn, not for the total amount prescribed. .
• Return of money . As in the previous point, the loans are paid in full at the time of expiration, unless there has previously been an amortization; while the credit lines charge the requested balance upon expiration, which may be much lower than the maximum limit set.
• Interest rate . The amount charged for interest on a loan is always lower than the amount for the lines of credit. In addition, in many lines of credit, commission of services must be paid for the amount not yet requested, to guarantee its availability.
• Renewal . Lines of credit can be renewed as many times as desired, provided that the credit issuer so guarantees; while the loans can not be extended or renewed: they must be paid at the end of the fixed term, in any case being able to be paid with money coming from a new loan that would come to replace it.
• We explain what an action is and the types of actions that exist. In addition, what are the common actions.

  

  1. What is an action?

  In the financial sector, known as action one security issued by a given society , and is equivalent to the monetary value of one (1) of the same parties in the capital of fragmented business .
  
  That is, stocks are investment documents that you assigned to the holder ownership of a portion of the principal social , which will be higher in the more shares you have. The holders of these securities are known as  shareholders .
  
  Commonly, the shareholders of a company enjoy political rights (vote at shareholders' meetings to decide on business management), and economic rights (receive benefits from the company and eventually earn profits in relation to the number of titles they manage).
  However, since the shares  are usually freely transferable , there are usually majority and minority shareholders, the former always with greater decision-making power when handling larger portions of the corporate capital stock.
  
  The return of the shares, that is, the money they generate to their holder, is usually considered an investment in variable income, that is, that lacks a fixed payment determined by contract in advance, but varies according to the performance of the company and Obviously, the amount of shares you have. But all the shareholders of a successful company receive economic benefits from it.
  The purchase and sale price of an action will depend on the financial situation of the company at the time of the transaction. In many cases, the purchase of cheap shares and their subsequent more expensive sale is an indicator of good business performance, so that their ownership is part of the assets of each investor . This value has different mechanisms to quantify and allocate, as occurs in the stock market indices (the stock market).
  

  2. Types of actions

  

  There are the following types of actions:
  
  • Common or ordinary . They give the possessor a share in corporate assets and the right to voice and vote in the corporate boards of the company.
  • Preferred . Shares with a generally fixed dividend rate, with payment preference over the common ones, for various financial reasons.
  • Of limited vote . They give the holder the right to vote only in certain business matters, in exchange they tend to be preferred or give a higher dividend than the common shares.
  • Convertibles . Those actions that can be converted into bonds (although the usual is that it happens in reverse).
  • Of industry . Instead of providing capital to the company, the holders provide services or a specific job and receive shares in return.
  • Released . Those that do not require payment by the holder, since they are the payment of benefits or utilities that the latter should have received.

  3. Common actions

  

  Common shares are, first and foremost, financial assets. They lack an expiration date , are fully negotiable and represent a small portion of the company's property.
  Its issuance usually responds to urgent financing needs, but it is the most expensive way to raise funds , since the returns generated in the future must be allocated to the benefit of the shareholders.
  In addition, selling shares means losing the autonomy of the company in some way, since shareholders usually gain voice and vote in decision-making.
  The shareholders also have a limited liability in the company, that is, that their personal assets will not be at risk before the performance of the company nor will they automatically form part of the company's total assets.
  In this way, a common shareholder can not lose more than his economic contribution to the company (equivalent to a defined number of shares purchased, for example).