{"id":489,"date":"2021-04-27T05:04:21","date_gmt":"2021-04-27T05:04:21","guid":{"rendered":"https:\/\/enorcerna.com\/wiki\/what-is\/accounting\/"},"modified":"2021-04-27T05:04:21","modified_gmt":"2021-04-27T05:04:21","slug":"accounting","status":"publish","type":"post","link":"https:\/\/enorcerna.com\/wiki\/what-is\/accounting\/","title":{"rendered":"Accounting"},"content":{"rendered":"
\n

What is contability?<\/h2>\n

Accounting is a branch of financial economics<\/strong> that produces quantitative information in a systematic, structured and expressed in monetary units,<\/strong> about the transactions carried out by various economic entities.<\/p>\n

According to Enrique Fowler Newton: \u201caccounting is a technical discipline that, based on data processing on the composition and evolution of an entity's assets (\u2026) produces information for decision-making by administrators and interested third parties; and the monitoring of resources and obligations of said entity \u201d.<\/p>\n

Accounting objectives<\/h2>\n

Accounting has the following objectives and functions:<\/p>\n

    \n
  • Record all operations of entry <\/strong>Y egress<\/strong> of a company.<\/li>\n
  • Inform the financial situation<\/strong> of the company.<\/li>\n
  • Facilitate decision-making at the different hierarchical levels of the organization.<\/li>\n
  • Serve as means of financial control<\/strong> in different functional areas of the company.<\/li>\n
  • Allow the methodical, systemic and comprehensive analysis of the information in which the entity incurs for the normal development of its activities.<\/li>\n
  • Constitute a preservation medium<\/strong> Y multiplication<\/strong> of capital.<\/li>\n<\/ul>\n

    Accounting elements<\/h2>\n

    The main elements of which accounting makes use are the following:<\/p>\n

      \n
    • Assets: these are the assets, properties or rights that a natural or legal person possesses.<\/li>\n
    • Liabilities: obligations that a natural or legal person must fulfill in the future. Ex: debts.<\/li>\n
    • Equity: also called capital, it is the difference between assets and liabilities.<\/li>\n
    • Accounting books: files or documents in which the financial and economic information of a company is recorded.<\/li>\n
    • Financial statements: reports and records of economic and financial activities.<\/li>\n<\/ul>\n

      Types of accounting<\/h2>\n

      Accounting is a very broad science, so it can be classified as follows:<\/p>\n

      According to its origin<\/h3>\n
        \n
      • Public accounting<\/strong>: it is the branch of accounting that is responsible for the processing of patrimonial data of the public administration of a country at its different levels (municipal, provincial or national).<\/li>\n
      • Private accounting<\/strong>: is one that is responsible for registering the economic-financial operations of a particular company or of natural or legal persons.<\/li>\n<\/ul>\n

        According to the activity<\/h3>\n
          \n
        • Industrial accounting<\/strong>: deals with the recording of transactions of a manufacturing company, focusing mainly on the valuation of inventories and the cost of finished products.<\/li>\n
        • Business accounting<\/strong>: is the branch of accounting that focuses on the activities of a business, keeping the record of its operations and the breakdown of taxes to pay to the treasury.<\/li>\n
        • Service accounting<\/strong>: is the accounting used by companies in the service sector. It includes the accounting processing of the expenses incurred in providing a service and the income received from the provision.<\/li>\n<\/ul>\n

          According to the information<\/h3>\n
            \n
          • Financial Accounting<\/strong>: its objective is to record all the economic and financial operations of a company, as a result of its commercial transactions.<\/li>\n
          • Administrative accounting<\/strong>: It is carried only for internal use of the company, mainly to facilitate the functions of the administrative area during planning and decision-making.<\/li>\n
          • Tax accounting<\/strong>: deals with the registration of information related to tax obligations. It includes the presentation of sworn statements, annual balances, payment of taxes, etc.<\/li>\n
          • Cost accounting<\/strong>: this branch of accounting breaks down the operating costs of an activity into different cost centers (purchases, production, sales, etc.) to facilitate the study of the cost structure of a company.<\/li>\n
          • Management accounting<\/strong>: records financial operations in order to know and control costs, contributing to planning and decision-making.<\/li>\n<\/ul>\n

            Importance of accounting<\/h2>\n

            Accounting is one of the most relevant elements of a company because:<\/p>\n

              \n
            • It allows to know the past, present and economic-financial future of an organization.<\/li>\n
            • Facilitates decision making<\/strong> through the analysis of the financial situation of the company.<\/li>\n
            • It serves as control medium<\/strong> to various sectors of the organization (sales, warehouses, production, among others).<\/li>\n
            • It provides data that, applied to ratios and indicators, allow inferring the financial health of the company.<\/li>\n
            • As an administrative management tool, it allows managing inventories, accounts receivable and payable, expenses and fixed costs, etc.<\/li>\n
            • Record all transactions<\/strong> that have to do with the main activity of the entity, facilitating the comparative analysis of accounting exercises during different years.<\/li>\n
            • At the time of requesting external financing, it offers information to banks about the company's equity evolution.<\/li>\n<\/ul>\n\n\n\n\n\n
              Bibliography:<\/th>\n<\/tr>\n<\/thead>\n
              \n
                \n
              • Newton, Enrique Fowler. Basic accounting<\/em>. Argentina: Editorial La Ley. 2019, 6th Edition.<\/li>\n
              • Ferguson, CE and Gould, JP Microeconomic Theory<\/em>. Publisher: Fondo de Cultura Econ\u00f3mica - Mexico - Argentina. 1985, 6th Edition.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n\n\n
                \n \n
                \n \n
                \n
                \n \n\n
                <\/div>\n <\/div>\n
                \n \n\n
                <\/div>\n <\/div>\n
                \n \n\n
                <\/div>\n <\/div>\n
                \n \n\n
                <\/div>\n <\/div>\n
                \n \n\n
                <\/div>\n <\/div>\n <\/div>\n \n
                \n
                \n \n\n
                <\/div>\n <\/div>\n
                \n \n\n
                <\/div>\n <\/div>\n
                \n \n\n
                <\/div>\n <\/div>\n
                \n \n\n
                <\/div>\n <\/div>\n
                \n \n\n
                <\/div>\n <\/div>\n <\/div>\n<\/div>\n \n\n
                \n Rate this post<\/span>\n <\/div>\n <\/div>\n","protected":false},"excerpt":{"rendered":"

                What is contability? Accounting is a branch of financial economics that produces…<\/p>\n","protected":false},"author":1,"featured_media":490,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-489","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-what-is"],"_links":{"self":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/489","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/comments?post=489"}],"version-history":[{"count":0,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/489\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media\/490"}],"wp:attachment":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media?parent=489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/categories?post=489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/tags?post=489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}