Accounting

Accounting

1. Definition.

   • Technique of classifying, compiling and recording the operations in which a person incurs, whether natural or legal, in an economic action, with respect to the business, it allows once the results are obtained to make decisions in the different companies.

2. Importance.

   • It is one of the basic operations of our complex economic system.
   • It is necessary, from a practical and legal point of view.

3. Objectives.

   • It allows the trader to know at all times the active and passive situation of his trade, that is, of how the company is being managed.
   • Guide to planning and control, through the interpretation, measurement and representation of heritage and its variations.

4. Characteristics

   • Relevance.
     • When it is useful for making economic decisions.
   • Reliability.
     • When it is free from material errors, it is neutral and integrated.
   • Comparability.
     • Allows you to compare the situation over time and with other companies.
   • Clarity or understandability.
     • Facilitates the formation of judgments for decision making.
   • Materiality.
     • Degree to which information can be omitted, incorrect or grouped with other information without misleading.
   • Consistency.
     • The same accounting methods are used year after year.
   • Timeliness.
     • Information must be available at the right time to be useful.
   • Verifiability.
     • In the event that an external person needs to observe the accounting through the use of similar methods, he will obtain similar results.

5. Types of accounting:

   • Administrative accounting.
     • Information system that provides services in accordance with the requirements of the administration, which is practically oriented to help in the control, planning and decision-making functions.
   • Financial accounting.
     • Number information system that is represented by a monetary unit that is based on economic transactions, financial position and performance of the company.
   • Cost accounting.
     • Any accounting technique or mechanics that allows calculating what it costs to manufacture a product or provide a service. It allows us to analyze financial and non-financial data that has links to the acquisition costs or resource expenses of the company.
   • Government accounting.
     • Technique that supports government accounting systems and is used to record the transactions carried out by public entities, expressed in monetary terms.
   • Tax accounting
     • Aimed at quantifying the tax burdens of taxpayers and determining compliance with the tax obligations of the subjects.

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