1st Bac - Variations in Accounts

 Variations in asset accounts: On the basis of the double-entry principle, any increase in an account - considered as an asset - must be registered on the debit, on the other hand, when it means a decrease, it but be registered of the credit.

In the example of pizza restaurant, the purchase of an oven, the account involved could be equipment, since it's classified as an active it increases it value and it is registered in the debit ($5500). If in the future the oven was sold, it means a decrease in the asset account and an amount in the credit.

Variations in the liability accounts: In what has to do with the accounts grouped under the framework concept of liabilities, considering again the double-entry principle, all increases in in these financial accounts must be registered in the credit, while the decreases in the debit.

In the example of a shoe store, when a payment is done to a financial institution for a credit, this decreases the loan it must be registered in the debit from the loan account, on the other hand if the business gets another loan it would be registered on the credit.

Variations in the equity accounts: The variations in the equity accounts, framed in the approach of the double-entry principle, it has the same logic as the variations in liabilities. 

In the example of a bakery, if the entrepreneur uses personal savings to buy an oven, the account of equity that will increase is capital so the effect is registered on the debit.

Variations in income accounts: When the business generates income, from the sale of goods and services, this amount will be registered in the account income from sales, as an income account it will always be on the credit.

Variations in costs and expenses accounts: Every increase in the amount of an accounts, considered as costs or expenses but be registered on the debit.

Finally, it should be remembered that the accounting reasoning proposed for the variations in assets, liability, equity, income, costs and expenses is the one recommended to the person in charge of accounting for financial movements, before recording a transaction.



Comments

Post a Comment

Popular posts from this blog

2nd Bac - Employment in the Market

Image
 The market supply and demand functions for a given good are:   You are asked to: 1. Calculate the equilibrium price and quantity. 2. Explain what would happen if P = 170, and if P = 110. 3. Make the graphical representation of the two previous questions.Remembering that we must always indicate clearly: - The titles of the axes - Equilibrium price - Excess demand and excess supply - Legend - The scales must be well proportioned and have to be in relation to the data in the table. data in the table.  https://www.youtube.com/watch?v=Srg5iAp68rw&ab_channel=InLecture The market It is a social institution where sellers and buyers interact. The plans of those who are going to sell are embodied in the SUPPLY curve, while the plans of those who are going to buy in the supply curve, while the plans of those who are going to buy in the demand curve. DEMAND curve. Supply and demand determine the price and quantity. Classification of markets The market is the economic scenario wh...
Read more

1st Bac -Basic Profit and Loss Statement

Image
Basic Profit and Loss Statement Another instance that takes part of the final step is the generation of the profit and loss statement. In which it shows the profit or loss generated by the entrepreneurship according to income, cost and expenses.   Characteristics of the Profit and Loss Statement The profit and loss statement is a financial report that summarizes, only for a period of time called accounting period (month, trimester, semester or year). The accounts of income, costs and expenses that make part of this statement; at the end of the accounting period are emptied and at the beginning they will start at zero. In the case of the balance sheet, it does not restart.   Importance of the Profit and Loss Statement When the entrepreneur needs to know the value of the profit or loss that the project is generating. Also known as the result balance, it is the addition and subtraction of incomes, costs and expenses. It is important for the entrepreneur to know the development of...
Read more

1st Bac - The Entrepreneurship Ecosystem

Image
  https://youtu.be/mW6dGqp4YYQ The entrepreneurship ecosystem 1. What is an entrepreneurship ecosystem? 2. Stability 3. Activity  4. Entrepreneurs 1. What is an entrepreneurship ecosystem? An entrepreneurship ecosystem is an economic, social, and cultural environment comprising multiple stakeholders involved in or benefitting from concentrated activities related to entrepreneurship. These stakeholders are individuals, organizations and institutions across the private and the public sector such as entrepreneurs, investors, government, military, aid agencies, universities, research centres, professional services firms, local communities, and many more. The activities carried out by the stakeholders are largely geared towards facilitating entrepreneurship in a wider sense. Although these activities are not following a concerted approach they are interrelated. Entrepreneurs and investors represent the nucleus of an entrepreneurship ecosystem around which everything revolves. 2. St...
Read more