As you know, all the accounting is based on the postings.Despite the fact that at first glance seems to be posting something terrible, actually accounting entries - it is only a reflection of the economic accounting of all transactions.You have purchased raw materials, to repay the loan, or have the customer service?All this should be reflected in the accounts.Even the most minor operation must be fixed to the outcome document of the state of affairs in the company, the balance sheet could be put together.At the same time the diversity of economic transactions in which the company is involved, can be divided into four simple groups and similar accounting exercise.You just need to understand the logic of these four groups, to lift the veil of secrecy over the accounting operations.
The first group is referred to as asset restructuring.Assets - this is what the company owns, such as cash or production equipment.At that moment, when you are spending your money on the purchase of equipment, you just realize restructuring.All types of wiring of this group carried out both active debit account that you increase (balance sheet assets are always taken into account in debit) and credit accounts that you are reducing.In our example, would be credited to the account where the funds are taken into account.
Accounting entries of the second group are similar in principle to the previously discussed.Only in this case we are not dealing with the assets and liabilities with.The same applies to liabilities on the company's debts and its capital, which is defined as the proportion of shareholders in the form of investments and profits.Restructuring of liabilities may occur when you prolong the term of the loan, which means that he is transferred from short-term debt into long-term debt.In this case it is necessary to lend long-term debt (liabilities in the balance sheet are taken into account in credit) and, accordingly, to debit the short-term.
third group, in contrast to the above examples, integrates accounting entries that associate assets with liabilities.In this case, there is an increase and the addition of both.Pretty simple example is now taking the funds borrowed.In this case, in the account have additional means, i.e.asset account is debited, but at the same time growing and the debt owed to creditors of the enterprise and, therefore, the appropriate liability account is credited.On the same principle takes account of incomes, only loans in this case, the capital.
Finally, the fourth group includes the typical wiring of accounting, leading to a decrease in both assets and liabilities.As you might guess, to such postings include debt repayment and accounting costs.In the first case, we will credit the account containing information on funds simultaneously debiting the account, taking into account our debt.In the case of costs, we need to debit the special account, which reflects the cost of production.It will then be used to calculate the profit.
learn all the above journal entries, you can easily understand virtually any operation performed by your accountant.The main thing - do not forget the general principle that if something is debited, then something needs the same amount credited.Remember also that the growth of assets is always reflected debit, and the growth of liabilities - respectively the credit.Guided only by such superficial knowledge, you can easily navigate through the key accounting documents and, therefore, will be aware of what is happening in the company, which is so important for management decisions.
