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Economic Terms
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Section:   en » Economic terms » Accounting      16 января 2015  
Accounting - ordered system of collecting, recording and summarizing information in monetary terms of the condition of the property and liabilities of the organization and their changes (cash flow) by a solid, continuous and documentary account of all business transactions.

Objects of accounting are the property of organizations, their liabilities and business operations undertaken by organizations in the course of their activities.

Accounting in accordance with the law on Accounting can be carried out: the chief accountant, taken at the company under an employment contract, the general director of the absence of Accountancy, is not the main, or a third party (accounting services).

The main objective of accounting is to form a complete and accurate information (financial statements) on the activities of the organization and its property status, on the basis of which it is possible to:

- Prevention of negative results of economic activities of the organization;
- Identification of internal reserves to ensure financial stability of the organization;
- Monitoring compliance with the implementation of the organization of business operations;
- Monitoring the feasibility of business operations;
- Monitoring the presence and movement of assets and liabilities;
- Control of the use of material, labor and financial resources;
- Monitoring the compliance of approved rules, regulations and budgets.

Internal users of financial statements - the leaders, founders, participants and owners of property of the organization.

External users of financial statements - investors, creditors and the state.

Accounting is closely linked with the tax and management accounting

Accounting has been widely used in the Central Andes (Peru, Bolivia) in the state and public order in the I millennium BC. e. by Lumpy writing Inca - pile consisting of both numeric entries decimal system and not numerical entries in binary coding. In the pile of used primary and additional keys, position number, color coding and Education series of repetitive data. Kip for the first time in the history of mankind has been used for the application of this method of accounting as a double record.

In the XVIII century, rules were formulated Barremian of debit and credit. In 1840 Vanier put forward the principle that the accounting is conducted on behalf of the company, not the owner.

Method of Accounting

The collection of all techniques and methods by which in Accounting reflects the movement and condition of economic resources and their sources, it includes the following key elements:
- documentation
- Evaluation
- The system of accounts
- Double entry
- Inventory
- calculation of
- Drawing up the balance sheet and statements.

Subjects Accounting

Accounting can be carried out:
accounting, part of the enterprise;
head of the organization;
the organization.

Principles of Accounting

Accounting Principles - the basic, initial, basic provisions of accounting as a science, which determine all future arising from these statements.

The main accounting principles are the following:

The principle of autonomy suggests that this or that organization exists as a separate legal entity; its property is strictly separated from the property of its owners, employees, and other organizations. Accounting data represent a single system that meets the objectives of management of assets, liabilities and business operations carried out by the organization in the course of its operation. Elements of accounting, do not affect the business processes are exempted from the accounting system as unnecessary. In accounting and balance sheet only property that is recognized as the property of that particular organization.
The principle of double-entry - double continuous reflection of economic phenomena, facts and operations, predefined using double entry in the accounts, t. E. At the same time and for the same amount on the debit side of the account and the credit of another account balance.
The operating principle of the organization suggests that the organization is functioning normally and maintain its position in the market for the foreseeable future, repaying obligations to suppliers and customers and other partners in the prescribed manner. This principle makes it necessary to link the organization's assets to its future profits which can be obtained using these assets. Of particular importance called principle acquires the valuation of the property and liabilities of the organization.
The principle of objectivity is that all business transactions must be reflected in accounting, be registered for all stages of the account, confirmed by supporting documents, based on which the accounting is conducted.
The precautionary principle implies a certain degree of caution in the process of forming judgments in the calculations made in the conditions of uncertainty, which allows to avoid the overstatement of assets, revenues and understating liabilities or expenses. Compliance with the precautionary principle prevents the occurrence of hidden reserves and excess reserves, deliberate understatement of assets or income, or the deliberate overstatement of liabilities or expenses. Neglect of this principle will lead to the fact that the financial statements will no longer be neutral and, therefore, lose reliability.
Accrual - all transactions are recorded as they occur, rather than at the time of payment, and relate to the reporting period when the transaction occurred. This principle can be divided into:
principle of registration income (revenue) - Revenue is recognized in the period in which it is received, not when the payment is made. In Russia, the time of sale of products is determined by the shipping and payment. International standards allow for a fixed realization of shipping, delivery, obtaining money by the seller or agent;
correspondence principle - revenue reporting period must be weighed against the costs, due to which these revenues were received. Of course, the expense (income) relating to the respective gains (losses) recognized in other reporting period are accounted for separately.
The principle of periodicity is aimed at regular, recurring generalization of the balance - drawing up the balance sheet and financial statements for the year, half-year, quarter, month. Named principle ensures the comparability of accounting data, allows after a certain period of time calculate financial results.
The principle of confidentiality. The content of the internal accounting information - a trade secret organization, the disclosure of and damage to its interests established by the legislation provides for liability.
The principle of monetary measurement, t. E. The measurement and the calculation of economic activity and production processes; as the unit of currency of the country stands.
The principle of continuity implies a reasonable commitment to national traditions and achievements of Soviet science and practice.

The protective function of accounting

Under the protective function of accounting understand ensuring the protection of property interests of economic operators, namely:
owners (participants, shareholders);

There are two components of the protective function of accounting:
precautionary (preventive)
watchdog (sledoobrazuyuschaya).

Precautionary (preventive) function focused on the difficulty of violations by any person through the implementation of monitoring. That is the very system of accounting is constructed in such a way that all the actors involved in the implementation of business transactions were as transparent as possible; known to a large circle of persons; subject to immediate control; linked to the actions of others.

Watchdog (sledoobrazuyuschaya) function is activated after the violation occurred. It provides the ability to adequately reflect the accounting system of the facts destructive deviations in economic activity against the will of the intruders. That is, despite the efforts of the persons concerned to conceal information about violations committed under competently delivered accountancy in the accounting documents are traces that identify such facts.

Watchdog function is realized through the subsequent financial control:
- In a planned manner,
- In the event of information about the wrongdoing.
See also:

  • Foreign Economic Activity
  • Audit
  • Logistics
  • Management
  • Finances

  • Banks

    International Monetary Fund

    Wall Street

    Bank of America

    JP Morgan Chase

    Wells Fargo


    Goldman Sachs

    Morgan Stanley



    BNP Paribas

    Credit Agricole


    Credit Suisse

    Royal Bank of Scotland (RBS)

    Deutsche Bank

    Sberbank of Russia


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