Accounting accounts are a special method of grouping an object of observation according to an economic criterion, which allows one to reliably reflect the initial, final state and change of objects of accounting during business operations. Accounts are opened for all types of assets, income, capital, liabilities, expenses. They are divided into regulatory and applied independently.
There are certain accounting rules that are fundamental to the work of any accountant. In order to understand how the whole accounting system works, it is necessary to understand the very essence of the concept of “account”.
The term “accounting account” means a specific method of economic grouping, which allows to systematize current information on various indicators of economic activity in a monetary assessment. It is a store of information, which is then generalized and used to compile various summary indicators and financial statements. Based on the totality of all accounts, the main reporting of the enterprise is compiled - the balance sheet.
All accounts have names and codes that are defined by the so-called “Chart of Accounts”. Each of them reflects objects grouped by the principle of homogeneity. Homogeneous types of funds and their sources are shown on those accounts that have a name reflecting the nature of the information. In the “Chart of Accounts” codes, names of various accounts and comments on their use are indicated.
Accounting accounts have accounts and are maintained in monetary terms. All these records are made in strict chronological order (in the order of the date of the business transaction) according to the primary documents.
Each account is divided into 2 parts:
- the left side is the debit denoted by "D" or "Dt";
- the right side is a loan designated “K” or “CT”.
In Latin, “debit” means “must”, and “credit” is translated as “believe”.
The financial transactions displayed on any account entail an increase or decrease in a certain group of funds. Each of its sides is intended for separate display of decrease or increase in amounts. All amounts reflected on its left side are called debit, and recorded on the right side are called credit.
Schematically, accounts are displayed as follows:
Number, name.
Debit Credit
In accounting, there is such a thing as double entry. This concept involves the reflection of all operations in at least two accounts. So, any change in the record of one account should automatically be reflected in another account with which it “corresponds”. In this case, the total debit record is equal to the total credit record. From this rule follows the balance equation: the sum of assets is always equal to the sum of liabilities and capital of the enterprise.
Monthly totals (balances) of accounts are maintained in the General Ledger, which reflects information on each of them throughout the year. It records the initial (incoming) balance (balance) of the accounted object, after which its debit and credit changes for the month (turnover) are indicated, and then its balance is displayed at the end of the period. Since the balance is the difference between the turnover, it can be both debit and credit.
In accounting, there is a division of accounts into passive, active, active-passive. On active accounts reflect information about all types of property and other assets of the organization (fixed assets, goods, cash). On passive accounts reflect information about the sources of property and liabilities of the organization (authorized and other capital, calculations on loans). Active accounts have only a debit balance, while passive accounts have only a credit balance.
In addition to the above accounts, there are those that simultaneously reflect information about the property and the sources of its formation (profit / loss, settlements with buyers and sellers). They are called "active-passive." Their balance (balance) can be debit and credit.