Accounting Schools and Principles: Evolution and Key Concepts

Accounting Schools

School Contista (France): Edmond Desgranges - Accounting in 5 accounts.

Personalist School: Giuseppe Cerboni - Personification of accounts, legalistic approach.

Materialist School: Fabio Besta - Economic approach to accounting.

French Doctrine: Dumarchay - Theory of account values. Two accounts: integral and differential.

German School: Schmalenbach - Dynamic theory of balance. Schneider - Outlined the circulation of securities in the company, external and internal environments.

Accounting Interpretations

Legal: Cerboni - Guarantee against third parties.

Economic: Schmalenbach.

Formal: Schneider; Culminates with Mattessich.

Accounting: Empirical science with respect to an economic unit. The knowledge allows qualitative and quantitative economic reality to highlight the situation of the unit and its evolution over time.

Inventory Classes

By Character

• Compulsory: Official authority.
• Voluntary: Made for the convenience of the company.

By Extension

• Total: All elements of the business.
• Partial: Part of property, rights, and obligations.

By Cause

• Regular: Regularly conducted.
• Extraordinary: Special circumstances.

By Time

• Initial or Opening: At the start.
• Development: Throughout the life of the business.
• Final or Closing: When activity ceases.

Inventory Principles

• Specialization of the Year: Allocate to each period the magnitude of expenditure and income applied.
• Prudence in Valuation: Account for profits when they are incurred.
• Permanence of Evaluation Criteria: An accepted criterion should not vary from one exercise to another.

Types of Accounts

• Integral: Capture and represent assets and liabilities and changes in their values.
• Differential: Capture the differences in net worth as a result of accounting events.

Laws of Accounts Breakdown

• Breakdown: Similar but more detailed accounts.
• Integration: Register in the same general group, which must always be homogeneous.
• Connection: Relate to other accounts.
• Disposal Act: If the same account appears charged and paid in the same book, eliminate it.

Classes of Balance

Sums, Balances, Trial Balances, Liquidation, Inventory, Situations.

Current External Environment Magnitudes

• Purchase: Acquisition of goods and services.
• Expenditure: Monetary equivalent of the purchase.
• Sale: Cession of goods and services.
• Income: Monetary equivalent of the sale.

Domestic Flows Magnitudes

• Consumption: Portion of purchases applied to the production process for conversion into products.
• Cost: Monetary equivalent of consumption.
• Production: Results of the production.
• Costs: Equivalent of production.
• Cost of Sales: Equivalent of production in place.

PMM (Period of Monetary Maturation)

How long it takes from investing a monetary unit until it is recovered.

Composition of PMM

Sub-period of Storage (E₁): The time from when currency is bought until it is consumed.

Sub-periods