The concept of "balance" is used in economic, accounting. With its help, interval indicators characterizing the sources of the formation of certain resources are reflected, as well as the directions in which they are applied. Let us consider in more detail what balance is.
Terminology
For a better understanding of what balance is, one should turn to the immediate meaning of this word. It has Latin roots. The word "balance" comes from the words bis, which means "twice" and lanx is the scales. Thus, in the literal translation, the term means "two-handed." This word is used as a symbol of equality, balance.
general characteristics
Explaining what balance is, you should pay attention to the method that is used to build it. The set of available data is entered in a bilateral table. This method is widely used in economic analysis, accounting and planning. In the system of planned balances there are labor, monetary and material. With their help, the formation and subsequent distribution of certain types of raw materials, goods, finances, as well as working reserves is forecasted.
What is a balance sheet?
This term in financial accounting has two meanings. In accordance with the first, the balance should be understood as equality of outcomes. In this case, the results for credit and debit records, analytical, synthetic accounts are equal. According to the second value, the balance sheet acts as one of the most important forms of reporting. It reflects the state of the companyβs funds, expressed in monetary terms, at a specific date. So what is a balance sheet? This is a system of moment indicators, the value of which is so great that it is often allocated to a separate reporting unit. As additions to the balance, various forms of bang are made. reporting. Their task is to decrypt the information. Speaking about what is the balance of the enterprise, it should be said that this is the form in which all the funds of the company are reflected.
Document structure
In the balance there is an asset and a liability. These are two equal parts. In one of them, the composition of the funds is shown, in the second - the sources of their formation. What is an asset balance? This concept also comes from the Latin word. Translated, it means "active", "active". Accordingly, what is a balance sheet liability ? This is the inactive, "suffering" part. The most important feature of the balance sheet is the equality of the results of the liability and the asset, since these elements reflect the same thing, only from different angles. In the latter, they show the composition, and in the first, sources of funds. Each element present in one or another part is called a balance sheet. They, in turn, are grouped into sections. For each line of balance a serial number is provided. This facilitates her search.
Filling Features
Experts recommend compiling several forms of balance for different categories of stakeholders. The law does not regulate the reporting structure. However, there are certain standards and rules. They prescribe only the list and economic content for specific articles. Directly the degree of detail of the balance is determined independently by the accountant of the company. Today in Russia there is a tendency to simplify the structure of the document. So, over the past 30 years, the number of articles in the balance sheet has been halved.
Sources of information
As these are accounting accounts. As a rule, their name coincides with the name of the accounting object. There are two parts to any account: debit and credit. This division is due to the movement of funds - a decrease or increase. Each account has an initial balance - a balance for a specific object, and subsequently its decrease or increase. Thus, you can set a final balance at any time. To do this, an increase is added to the original balance, and the amount of reduction is subtracted from the resulting balance.
Account classification
Elements on which household funds are taken into account are divided into 3 groups. The first includes active accounts. They reflect the types of households. funds. Explaining what are the assets of the balance sheet, it should be said that the balance of such accounts can only be debit. This is due to the fact that the decrease in funds is limited by their size. The second group is passive accounts. They keep records of the sources of formation of households. funds. Their balance can be only credit. The third group is active-passive accounts. They keep records of both types and sources of funds. This group includes accounts for settlements with legal entities. The latter may act as debtors or creditors. In the first case, the accounts will have an active structure.
Subaccounts
These are intermediate links between analytical and synthetic accounts. With the help of subaccounts, a grouping of relevant indicators is carried out. In particular, the data of analytical accounts are used to obtain additional information about the objects registered.
Classification of balances
Separation is carried out according to the following criteria:
- Compilation time.
- To sources.
- The amount of information.
- The nature of the activity.
- Form of ownership.
- Object of reflection.
- The cleaning method.
In accordance with the time of compilation allocate balances:
- Current.
- Introductory.
- Liquidation.
- Unifying.
- Separating.
According to the sources, the balances are divided:
Depending on the amount of information, the balance can be consolidated or single. According to the nature of the activity, documentation on the main and non-main types is distinguished. In accordance with the form of ownership, there are balances of cooperative, state, private, joint, public and mixed organizations. Their difference lies in the source of the formation of funds. Depending on the objects of reflection, separate and independent balances are distinguished. According to the cleaning method, gross and net documentation is distinguished. Also in accounting, an alternative balance is used. This form is used to obtain evidence of the completeness and reality of the reflection of manufactured products, services rendered or work performed. That is, what is an alternative balance? This is the way by which used materials are shown for accounting for the production of a unit of goods and the actual output of products.
Categories by compilation time
At the time of occurrence of the company, introductory documentation is drawn up. What is the current balance, it is clear from the name itself. These summary tables are compiled over the entire period of the organization. In turn, the current balance is divided into initial, intermediate and final. Liquidation documentation is prepared upon termination of activity. When you split a large company or transfer one or more divisions to another company, a separation balance is formed. When combined, the corresponding documentation is compiled.
Important point
Before the annual reporting will be compiled , a reformation of the balance sheet should be carried out. What it is? This is a procedure in the course of which the distribution of profits made during the year or write-off of losses is carried out. The new financial period will begin, as it were, from scratch. Thus, on December 31 of the reporting year, the reformation of the balance is carried out. What is this for a novice specialist? This is a zeroing of the balance of accounts of accounting for financial results. In this case, close the account. Sales (90), Other Expenses and Incomes (91), and Losses and Profits (99).
Sources of Compilation
The compilation of inventory balances is carried out only on the basis of an inventory of funds. Such accounting is necessary when a new company appears on the property base that existed earlier or in the event of a change in the economic form of the company. The book balance is formed in accordance with the entries from the Books. However, the information does not pass preliminary verification through inventory. For the general balance, inventory data and accounts are used.
Amount of information
The unit balance sheet reflects the activities of one enterprise. To obtain consolidated documentation, sums are added up, which are listed on the articles of several unit tables. Along with this, the total results of the asset and liability are calculated . Such documentation in separate columns reflects the status of funds for various organizations. The line "Total" shows the overall indicator for the entire company.
Other categories
The main activity is the direction that corresponds to the course and the charter of the company. All other activities are considered non-core. In the departments that deal with it, a separate balance may be maintained. Depending on the cancellation method, gross and net balances are allocated. The first includes regulatory articles. They are called those in which, when forming the actual cost of funds, the amounts are deducted from the value of one or another article. In the net balance sheet, regulatory areas are excluded. This procedure is called "cleaning."
Detailed indicators
To obtain more specific information, synthetic and analytical accounts are used. The first reflect the generalized values ββthat characterize household assets. On analytical accounts, more detailed characteristics of accounting objects are used. They detail information obtained from synthetic articles. On analytical accounts, reflecting inventory values, contains not only monetary indicators, but also in-kind. Both of these groups show the same facts about the business of the company. In this regard, the totals on the records on both analytical and synthetic accounts should be the same.
Finally
Thus, given the above information, it becomes clear what a balance is. Beginning specialists should carefully consider the procedure for compiling it. Entering information in pivot tables is a very painstaking work. Mistakes in the preparation of the balance sheet can significantly affect the totals.