The objects in accounting are business transactions. They are elements of the processes occurring in the enterprise, or facts of the economic life of the company. Economic, accounting operations affect the financial position of the company.
Definition
A business transaction is a separate action, as a result of which the volume, composition, use and placement of funds and their sources change. In economic terms, any fact has 2 addresses. Changes in one object provoke an adjustment in another by the same amount. Business transaction - an event or action leading to a statement of the means and sources available to the enterprise.
Specificity
Business operations on the balance sheet affect the assets, that is, the property of the enterprise. They can relate to the sources of its formation (passive). There are events that affect both parts of the reporting. The facts of economic life constantly affect the balance sheet currency. This, in turn, leads to an adjustment in the value of the items of both the asset and liability.
Classification
The following types of business transactions are available:
- + AA. This category of events changes the composition of the property, that is, it relates only to the asset. In this case, the balance sheet currency is not adjusted.
- + P-P. These operations affect the sources of formation of material assets of the company. They affect only liabilities. In this case , the balance sheet currency also remains unchanged.
- + A + P. This category of events affects both the size of the property and the sources of its formation. Correction is carried out in the direction of increase. The balance sheet liability and asset balance increases by the same amount.
- -A-P. These operations also affect the property and the sources of its appearance. But the changes are going down.
Business accounting
Each fact of economic life must be defined in time, evaluated. In accordance with this, business accounts are filled out. The determination of the fact in time is determined by the need to establish the moment of registration. Datami reflect:
- Transfer of ownership of products, works, services provided.
- Getting loans and credit funds.
- The procedure for the recognition of expenses and income from ordinary and other activities, their reflection for the relevant periods in the documents.
- Settlement in foreign currency, etc.
Rating
Each business transaction should have its own cost at the time of the transaction. The enterprise without fail carries out an assessment of property for reflection in documents in monetary terms. In accordance with the current accounting principles, all liabilities, assets, equity, expenses, receipts should be reflected in the corresponding amount.
Tangible items purchased for a fee are estimated by summing the actual costs of the purchase. The property received free of charge is accepted at the market price valid on the date of posting. Material assets created at the enterprise itself are valued at the cost of manufacture.
Reflection features
The completed business transaction is executed on paper or electronic media. Through these documents, the primary registration of events is carried out. Registration is made in that sequence in which operations were carried out. This order allows you to:
- Keep a continuous, continuous record of objects.
- Substantiate records that are made in accordance with documents of probative value.
- Use reporting for operational management and ongoing monitoring of the enterprise.
In addition, compliance with financial discipline is ensured at the enterprise, since the primary documentation acts as the main source of information for further supervision of the appropriateness, correctness, legality of each operation.
Double entry
The formation of the information connection of synthetic accounts arising in the process of registering the facts of economic activity of a company is called correspondence in the nomenclature of the plan. It is worth saying that it also reflects the legal relationship between subjects. Correspondence can be systematic or chronological. The facts of economic activity are reflected in the accounts according to the principle (rule) of double entry. Its essence is that any event is recorded twice. Information reflects the debit and credit of the account. Such a record has a control value.
The aggregate debit turnover for synthetic accounts for the month should equal the amount of credit. If the values do not match, it means that an error was made in the reflection of events. In accordance with the principle of double-entry information communication that occurs between accounting objects, can be shown in different ways. For example, the formula image reflects the name of the offsetting accounts. In this case, the numerical value of the record is indicated. The reflection of the offsetting accounts in the primary documentation is called the account assignment.
Key specialist tasks
As part of his practical work, an accountant needs to solve three issues. They are to determine:
- The moment at which the business transaction was carried out.
- The value expression of the event.
- A method for classifying transactions according to the nomenclature of the chart of accounts.
Three key tasks follow from this, the solution of which will allow us to correctly form documentary reporting:
- Identification of the fact of economic activity in time.
- Event rating.
- Classification of operations by nomenclature.
Conclusion
Accounting, like any other discipline, has its own subject, objects of observation, methods specific to it and methods of recording, collecting, summarizing, accumulating data and transmitting it to users. The full use and reliability of reporting will depend on the proper use of existing tools. This, in turn, will enable interested parties to get an idea of the financial situation of the company in a timely manner.
Reporting is necessary for both external and internal users. The former include investors, creditors, and counterparties. Internal users are participants, employees of the management apparatus. Reporting allows you to identify areas of expenditure of funds, justification of costs, unprofitable areas of activity of the enterprise. Based on the results of the analysis of information, important management decisions are made.