Textile and Clothing Educational Corporation

Sales Specialty
Profesor : Rodrigo Cornejo

BASIC ACCOUNTING NOTES

General Concepts

Economic Fact Effort undertaken by man with the aim of satisfying his
needs.

Economic Activity Set of economic facts.

Different groups or units participate in economic activity.

Economic units: businesses and consumers.

Economic units can be classified into:

Production units (companies).
Units of consumption.
Circulation and distribution units.
Economic units may or may not pursue profit purposes; consequently, profit is not a
integrating element of the economic unit. They satisfy the economic needs of man,
therefore it is regulated and directed by society.
Economic units or businesses are classified:

Micro business
Small business
1 By size Medium-sized company
or magnitude Great company

Primary sector (agriculture, mining and

fishing
According to sector
2 Secondary sector (manufacturing)
Economic Tertiary sector (commerce and services)

According to the turn Manufacturers

3
the social object Commercials
- of services
Financial

According to the property Private

4
of the capital Public
Mixed
 5
Individuals
Simple collectives
According to your
Collective responsibilities
Societies limited
In simple partnership
Constitution of people

Legal Social
Companies Anonymous
of capital Partnership limited by shares
Cooperative

Companies have an internal organization in order to achieve their objectives.

Possess:

Financial Department.
Purchasing Department.
Production Department.
Department of Personnel or Human Resources.
Department of Administration.
Commercial Department.
Department of Computer Science.

The Administration Department must ensure that the various Departments coordinate.
properly their activities.

Its functions are:

Plan
Organize
To direct
Control
Coordinate

Accounting should be placed in the administration department as it is responsible for providing the
necessary information for the company to fully achieve its objectives.

Accounting is a subsystem within the administrative information system.

Accounting (definition): Accounting is the auxiliary technique of business organization that

provides us with the maximum information about the financial and economic movement of a company,
at a minimal cost.

Whatever the definition, accounting must be able to record economic events in

systematic form and must be aimed at preparing information following a certain
methodology.

The function of accounting is to record, but the mere act of noting economic facts or actions does not
It means that there is accounting. For it to be accounting, it is essential that it be
systematic registration, that is to say, there must be a system, a set of norms that orderly
contribute to a specific end.

In addition, there must be a methodology, that is, a set of rules that establish origin and manner.
The Bill

It is a systematic grouping of the credits and debits related to the same person or matter, which is
registran bajo un encabezamiento o titulo apropiado.

Presentation model: Schematic account 'T'.

Must News

Cargoes Fertilizers

Debts Credits

The Balance = Debits - Credits

In this scheme, annotations are made on a minimal issue.

Debit and Credit are conventional names.

Cargo Debit Annotation

Fertilizer Annotation in the Credit
Load or Debit Make a note in the Debit
Charge or Credit Make an entry in the Credit
Debts Sum of the charges
Credits Sum of the payments
Balance Difference between Debits and Credits

Types of balances:

a) If debits are greater than credits, the balance is DEBIT and is noted at the bottom of the account.
b) If Debits are less than Credits, the balance is CREDITOR and is noted at the bottom of the
account.
c) If the Debits are equal to the Credits, the account is BALANCED.

An account is a Creditor, if its balance is Creditor.

Ana's account is Debtor if its balance is Debtor.

Account Objectives

a) Group transactions of the same nature.

b) To have timely and organized information whenever one wishes to formulate the equality of
inventory.
c) Facilitate control over certain operations.

Types of Account

a) Asset Accounts

Let's remember that the asset is composed of:

Physical or tangible goods

Intangible assets
Rights
Each of them is represented by an account. In the different asset accounts, it is indicated the
Its main characteristic is that all Asset accounts must have a Debit Balance.

Treatment :
All asset accounts have the same treatment.

They increase with the charges, that is, with the incorporation of assets or rights to the company.
They decrease with the payments, that is, with the alienation of the assets or cessation of the
rights.

Example of asset accounts:

Merchandise Accounts receivable

Box Bank
Furniture and utilities Real Estate
Lands Machinery and Tools
Clients Employee Advance
Personal Account Patent
Right of keys
Etc.

Clients Reflects the rights arising from operations related to the regular course of business
business.

The following accounts deserve special attention.

Bank:

It is charged for the deposits made by the company.

It is charged for all the transfers made by the merchant, for purchase payments, expenses.
general, and others.
Your balance should be debit and indicates the money available in the bank. But in some
On occasion, this account may have a credit balance, which will indicate the overdraft. In this case
The account will be a Liability.

Personal Account :

It is charged by:
The withdrawals made by the trader or owner, whether in money or merchandise.

It is paid for:
Loans that the merchant gives to the company.

If the balance is OVERDRAWN, it represents what the merchant or owner owes to the company and therefore
It is an ACTIVE account.

If the balance is CREDITOR, it represents what the company owes to the merchant or owner and therefore is
a LIABILITY account.

Due to the fact that these two accounts can act as Asset and Liability accounts, they are called
Current Accounts.

Merchandise

This account is used to record everything related to the movement of products that the
 Purchases returns

This account can take a DEBIT balance. This last one can occur because in the account it
they record the sales including the profit. In such a way that, at the end of the period, they will have to
indicate the RESULT of the company's commercial management whether it is a loss or profit.

Due to this particularity of being both an Asset account and a Result account, it is said that merchandise is
a mixed account.

b) Liabilities Accounts

The liabilities consist of the debts or obligations that the company has incurred with third parties.
The liability can be determined in the following way.

LIABILITY = ASSET - EQUITY

The different liabilities accounts indicate how the company's debts are distributed.

Characteristics:

La principal características es que todas las cuentas de Pasivo deben tener saldo Acreedor.

Treatment

All liability accounts have the same treatment:

They decrease with the charges.
They increase with the fertilizers.

We will mention some and then analyze two of them.

Accounts payable.
Creditors.
It reflects all the obligations arising from operations outside the business line.
Suppliers.
Reflects all obligations arising from operations related to the business of
business.
Salaries payable.
Tax payable.

Must Letters payable News

It is debited for the cancellation of accepted bills It is believed by the acceptance of

by the merchant. letters from the merchant.

Your balance will always be Creditor and indicates the total owed for promissory notes payable.

Must SUPPLIERS News

Debited for cancellation of merchandise It is believed due to the purchase of

purchased on credit and for returns of merchandise sold on credit
purchases.
 Capital is the debt the company has with one or more owners.

Capital can be determined in the following way.

CAPITAL = ACTIVO - PASIVO

Characteristics:

The main characteristic, just like liability accounts, is that they must always have a BALANCE.
CREDITOR.

Treatment:

The Capital is treated the same as the Liabilities.

Decrease with the charges.
Increase with the Subsidies.

We will mention some Capital accounts.

• Capital, strictly speaking.

• Legal Reserves.
• Revaluation of Own Capital.

d) Income Statements

The income statements are intended to record the variations in capital caused by losses.
or for profits.
Through the analysis of the different accounts, we can conclude how the result was produced.
commercial exercise.

Features:

We already know that income statements are divided into:

Profit and Loss Accounts Loss.

Profit and Loss Accounts.

Currently, there is an opinion trend that profit and loss accounts do not exist as
However, they should be called Positive Results and Negative Results, because the
Loss or gain is ultimately determined by positive and negative capital variations.
In any case, for the purposes of this note and as a way to facilitate its understanding, it will be called
to these accounts by their traditional names

The main features of these accounts are:

Loss results must always have a debit balance, which is indicated by how much it has.
decreased the Capital during the fiscal year.

The result accounts must have a credit balance, and it indicates how much it has increased.
capital in the exercise.

Accounts allow us to maintain the invariability of capital.

If we analyze the treatment of the income statements separately, we will say that:

Loss Result Profit Result

The charges the The subscriptions the The charges the The fertilizers them
increase decrease decrease increase

Both the Debits in the Loss accounts and the Credits in the Profit accounts,
They only operate by exception, they do not correspond to usual cases.

Examples of some income statements.

Loss Result Profit Result

General Expenses Sales
Salaries Interest received
Social laws Discounts obtained
Taxes paid Rental income received
Granted discounts
Cost of sales
Paid rentals