Any business entity, from an individual entrepreneur to a global corporation, systematizes and analyzes every fact that occurs in its economic activity. Incomes, debts, expenses, movement of goods, production costs, resulting in profit and its investment are subject to accounting. But the accounting principles applied by a large joint-stock company will not be suitable for a company with a team of five people. What are the accounting methods, how and on the basis of what are they selected and used?
Types of economic accounting
With the advent of material production, the accounting process also appeared, since it became necessary to count and register the tools, its products and costs. With the development of production capacities, commodity-money relations were formed, the functions and significance of economic accounting were improved and modernized.
In order to describe and characterize business processes and property, natural (meters, grams), labor (human hours, hours actually worked) and money meters are used in accounting.
Depending on the objects of study and the methods used, business accounting can be divided into types: statistical, operational, tax and accounting. Let us consider in more detail the features and functions of accounting (financial) accounting.
Legislative framework
Unified requirements and a legal mechanism for choosing ways of organizing accounting for business entities throughout the country are established by the Federal Law “On Accounting”.
In accordance with this law, accounting refers to a systematic process of generating information in a documentary manner about all facts of commodity-money processes of an economic entity for subsequent reporting.
Standards, recommendations, regulations
In addition to Federal Law No. 402-FZ, the procedure for creating accounting policies and accounting methods are established by the following documents: other laws of the federal level (on joint-stock companies, simplified taxation), Civil and Tax Codes, and Government Decisions relating to accounting.
The second level of legislative regulation of financial accounting is accounting standards. This includes the Russian code of rules, drawn up in the form of separate accounting provisions, which are now only 24. This includes the International Financial Accounting Standards.
The third level of accounting regulation includes instructions and methodological recommendations developed by associations of accountants, as well as ministries and government bodies.
What tasks does financial accounting carry out?
In the process of accounting, certain stages can be distinguished: monitoring an object, measuring it, registering, processing information in order to include it in reporting. In accordance with the steps, accounting is designed to perform the following tasks:
- Collection and systematization of reliable and complete information about the financial position and property of the organization in order to provide this information in the form of financial statements to external and internal users.
- Monitoring compliance with applicable law and analysis of identified violations in the implementation of commodity-money relations.
- Ensuring financial stability of the organization, identifying hidden reserves for increasing financial indicators, preventing negative financial results.
In order to perform accounting tasks, the methods of accounting established by law are applied.
Financial Accounting Rules
The legal and regulatory framework requires accounting to comply with certain rules or principles. We list these principles:
- double recording application;
- keeping records and compiling primary documentation in Russian and in rubles;
- current expenses should be accounted for separately from financial investments and capital expenditures;
- obligatory documenting of each economic fact;
- maintaining accounting registers, the contents of which constitute the commercial secret of a business entity;
- accounting is made in monetary terms;
- obligatory periodic inventory of liabilities and property values;
- consolidation of rules, principles, methods of conducting accounting by establishing them in the accounting policies of an existing enterprise.
Account books
All economic facts accountant draws up the preparation of primary documents. The data of primary documents, in turn, are recorded and accumulated in the respective registers.
Such registers are formed on paper in the form of books or magazines, or electronic using computer technology, they must contain the following details:
- name of the register and owner company;
- the period for which the register is compiled;
- grouping of accounting objects in chronology or systematic;
- applicable units of measure;
- positions, signatures, surnames of persons responsible for maintaining the relevant register.
Who and what can use the methods
All organizations and enterprises operating in the country must, in accordance with the law, keep timely records of all property, sources of financing, debts and other objects.
Individual entrepreneurs who are allowed to use simplified taxation regimes, as well as units of foreign firms that do not use the accounting methods established by Russian law in their work, may not keep records.
Accounting should begin from the date of formation (registration) of the company and be kept all the time, continuously until the liquidation of the business.
Simplified methods of accounting may not apply to all business entities. The law establishes such a right for organizations related to the Skolkovo innovation center, non-profit organizations, and for representatives of small businesses.
Accounting policy development
A set of accounting methods is an accounting policy formed by an enterprise on its own. In the process of developing and compiling accounting policies, management chooses ways of registering accounting activities: a method for inventorying assets, writing off depreciation for their value, method and degree of cost grouping and evaluating production processes, rules for applying the chart of accounts and maintaining accounting registers and reporting.
Accounting policy - a set of accounting methods. It meets several requirements set forth in the law:
- Accounting should provide a complete collection of information about all processes and phenomena in the business without exception (completeness).
- All economic and economic events are recorded at the time of the transaction or immediately after the transaction, that is, in a timely manner.
- In order to prevent hidden reserves, debts and expenses are more readily recognized than assets and income (prudence).
- The primacy of content over form.Any business processes are reflected in the accounting on the basis of their economic nature, it is not necessary for them to have a legal form.
- Accounting is divided into synthetic and analytical. The data of these accounts, account balances and turnover balances should coincide at the end of the reporting year and not contradict each other.
- The accounting policy of the company is designed to be rational, that is, all applicable accounting methods must correspond to the size of the enterprise and the type of its economic activity.
When you need to change something
Accounting policies are consistently applied year after year. But there are times when an approved policy needs to be changed or adjusted, for example, when switching to simplified methods of accounting. In order to be able to compare and analyze data for several years, change the accounting policy when changing the reporting time period.
Adjustments to accounting policies may be made in the following cases:
- Change in the legislative framework. In connection with the introduction of new accounting requirements in regulatory acts or standards, firms will be required to bring their accounting activities into line.
- Change in the way of accounting. The manager can choose or develop independently such a method of accounting, which will allow much better accounting for a particular object.
- Transition to another type of activity or a significant change in working conditions.
What method of accounting is called simplified
Depending on the size of the business, the scope of activity, the number of employees, organizations that have the right to use a simplified type of accounting can choose the necessary methods and fix them in the accounting policy.
At the same time, the accounting policy of a micro-enterprise should ensure the rational use of the organization’s resources, a set of accounting methods, which will not be a burden for the entire business. That is, to meet the requirement of rationality.
Simplified methods of accounting require the possibility of reflecting transactions in the accounting on a cash basis, without the use of double entry on accounts.
A company that uses lightweight accounting can also facilitate the working chart of accounts by reducing the number of synthetic accounts in it. For example, to take into account all expenses incurred in production only in the twentieth account “Production”, instead of using accounts 23, 25, 26 and others.
Register waiver
Firms using simplified accounting can reduce the number of accounting registers used or abandon them altogether. Moreover, all operations are recorded in the Journal (Book) of facts of production activity, which is also a universal register of synthetic, analytical and statistical accounting, as well as a source of information for the formation of final reporting.
The business entity independently chooses the accounting methods used. The main condition for such a choice is the compliance of the methods with the current legislation and their fixing in the accounting policy adopted for the financial year.