Understanding Accounting Principles and Practices

Accounting: It uses information systems to register technical summaries, classify, and analyze transactions based on operations and along the timeline of the company. Accounting Steps: Identification and economic analysis of differences, quantifying the value of the operation, and booking entries to decide (journals, ledgers, and auxiliary) for the preparation of accounts, balance sheets, and analysis of balances. Characteristics of Accounting: Order, adequacy, relevance, objectivity, rigor, and standardization. Normalization: Accounting is understandable for all persons who need the information it contains. Standard Accounting Plan Types: General Types of Accounting: Microaccounting: Economic domestic, profit entities without profit motive, business (costs and financial), and Public Sector Accounting Types: Financial and Cost Accounting register the operations of the company, external costs, and internal costs of the company. Microeconomics: It studies the economy of businesses without profit motive. Accounting Depends on Type: Type of activity, volume of business, legal form, and Alternative Methods of Accounting: Principles: The principle of double entry and monetary valuation representation. Double Entry: There are 2 accounts where entries change and vary at the same rate as the first account paid for from the other. Monetary Valuation: Its objective is to provide reliable, objective, standardized, and updated information about the company's assets. Accounting Cycle: Opening Accounting: Initial inventory of the opening entry. Registration of Operations: Daily and periodic Time: for all closing accounts, adjustment operations, and calculated benefits. Accounting as: Yearly: It begins with 2 operations: - Initial Inventory: Relation of assets, liabilities, and rights of the company. - Opening Entry: Data from the inventory of the company charged to one account. Ledger: Movements are recorded. Daily Books: They represent the recorded entries of accounting operations. Heritage: The resources of assets, rights, and obligations that the company has concerning its obligations.

Current Assets:
- Intangible assets
- Plant and equipment
- Fixed assets
- Real estate
Assets:
- Stock
- Client debts
- Short-term investments
- Cash
Net:
- Capital
- Reserves
- Founding
Non-Current Liabilities:
- Long-term debts
Liabilities:
- Short-term debts
- Supplier debts