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What is General Accounting definition/concept

Any business or organization needs to incorporate an accounting system to take full control over the mix of economic and financial activities. In this sense, everything that refers to an economic dimension of a company has an accounting impact . General Accounting

Ideals and Basic Principles of General Accounting

Accounting informs about the current situation of a company, its annual or historical evolution and forecasts for the future. In other words, companies are constantly changing and accounting is a tool to explain this change.

Accounting is intended for anyone who maintains commercial or labor relations with the company, for example, with the entity’s management, employees, the state through the Ministry of Finance, in addition to creditors and suppliers.

In order for the information to be treated as useful, it is necessary to use a unified system, also known as the general accounting plan. This plan particularly affects the external relations of an entity, since each company has internal accounting, also known as cost or cost accounting.

The main accounts of General Accounting

Briefly, it can be said that there are four general groups of G/L accounts: General Accounting

1) one of active;

2) one of profit and loss;

3) one of passive;

4) one of equity.

Among those that form the first group are the non-current asset accounts, that is, a set of elements that a company buys and keeps in the company in the long term (the main non-current asset is fixed assets, which can be immaterial as a patent or material such as machines). There are also current assets accounts that refer to what the company acquired in order to sell in the short term, as well as the money deposited in a bank. General Accounting

The income statement refers to the company’s operating income and expenses. Among the expenses, personal expenses, rent, taxes, purchase of material to meet the credits requested from the bank or electricity supply should be included. Obviously, revenues refer to sales of products or services.

Liability accounts refer to the set of debts that a company has to put into practice new projects. Therefore, these accounts indicate debts that are incurred with other people or entities.General Accounting

Equity accounts refer to the money with which the company started its economic activity , as well as the money the company was able to generate by itself.

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