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Account Payable

What are Accounts Payable?


Accounts payable are the amounts in debt of a company to the creditors for the services or goods acquired. If
a store receives goods in advance of the payment, the purchase is placed in the accounts payable file.
Accounts payable may correspond to merchandise, private or public services.
Importance of Accounts Payable
By carrying out an accurate file of accounts payable, the store will avoid losing track of payments, not paying
a receipt twice or having a thankless surprise when a number of unexpected bills expire at the same time.
When reviewing the accounts payable file the owner should see the money owed and keep a check of all
invoices to be paid for a period of time. The total amount in accounts payable should match the total receipts
of creditors. If this is not the case, an amount of a receipt may not be correct or capable, the payment was
already made without being registered
.

Account Receivable
What are Accounts Receivable?
Accounts receivable consist of the money that is owed to a business for the goods or services it provides. It is
a record of the sale date, to whom it was sold, the amount and when the payment will be made. The terms of
credit may vary in periods of days, weeks or even years.
Benefits and Disadvantages
The benefits of accounts receivable for the tool store is that they maintain a regular customer, since the
construction company will surely avoid changing the supplier once they access the credit terms. The store will
now have a regular flow of income and can afford the availability of a product knowing that there is already a
buyer.
Accounting

Accounting definition?
Accounting is the social science that is responsible for studying, measuring, analyzing and recording the
assets of organizations, companies and individuals, in order to serve in decision making and control,
presenting the information, previously recorded, in a systematic manner and useful for different stakeholders.
It also has a technique that systematically and structurally produces quantitative and valuable information,
expressed in monetary units about the transactions carried out by economic entities and certain identifiable
and quantifiable economic events that affect it, in order to facilitate it to the various interested publics.

The purpose of the accounting is to provide information at a given time and the results obtained over a period
of time, which is useful to users in making their decisions, both for the control of past management, and for
estimates of future results, endowing such rationality and efficiency decisions

Accounting Change
When the accounting change is motivated by a change in accounting regulations or the adoption of a new
accounting standard, the new regulations usually establish, in the transitional provisions, the accounting
treatment of such change. In case no transitory provisions are established, the general criterion should apply.

In general, an accounting change can be applied retrospectively or prospectively. The retrospective


application consists of applying the new accounting principle to the corresponding items of the financial
statements as if it had always been applied, that is, since the economic event that gave rise to the
corresponding item occurred. This implies the need to adjust the initial balances of the items affected by the
change. On the contrary, the prospective application consists in applying the new accounting principle to the
transactions that take place after their adoption; therefore, there is no need to adjust the financial statements to
the new accounting principle
Accounting Cycle
All accounting work must be done following a sequence or logical order, through a series of appropriate
procedures, and establishing periods or cuts to delimit and present the information produced. The Accounting
Cycle is the set of steps and procedures in which the financial information of the company is analyzed,
prepared, recorded and prepared and completed in a specific period of time, called the accounting year.
Stages of an accounting cycle
The life of a business is divided into cycles or accounting years and these, in turn, are divided into three
stages: opening, movement and accounting closing.
- Opening. At the beginning of the activity, the company opens its accounting year and begins to perform
economic transactions that are being collected in its accounting books, both in the mandatory and auxiliary.
- Movement. Registration of transactions.
- Closing. At the end of an accounting period, the accounts are closed to determine the economic result for the
year.

Abatement
and denominates diminution to a reduction, loss or loss of something. It can be a physical or symbolic change.
For example: "The government announced a 5% decrease in the Value Added Tax from next month", "Plans
to achieve weight reduction should be developed by nutritionists", "We must work together to achieve the
reduction of social violence.
Depending on the case, the decrease can be positive or negative. If we talk about the rate of unemployment or
unemployment in a country, as long as the number is reduced, it will be good news because it means that
there are fewer people without work. Therefore, the decrease in the unemployment rate is an objective that all
governments tend to consider
Account

Account, is the basic and central element in accounting and payment services. It is also the minimum
accounting unit capable of summarizing an economic fact. The accounting account is the representation
valued in monetary units of each of the elements that make up the assets of a company (assets, rights and
obligations) and the result thereof (income and expenses), allows the monitoring of the evolution of the
elements in time. Therefore, there are as many accounts as patrimonial elements that the company has and,
consequently, the set of accounts of a company supposes a complete representation of the patrimony and the
result (profits or losses) of the company.1
The economic transactions are recorded in the accounting through the variations in the value of the different
accounts, facilitating the recording of the accounting operations in the accounting books. Each account is
configured by a title that refers to the element it represents, a numerical code that identifies it and a value of it,
are graphically represented as a T, which collects the annotations or movements of the account, where to the
left of the T, it is called "debit" or "must" and to the right "credit" or "have", without these terms having any
other meaning than indicating a pure physical situation within the account.

Change in
ACCOUNTING PRINCIPLES
The Accounting Principles constitute bases or rules established with obligatory character, that allow
that the registered operations and the balances of the accounts presented in the Financial Statements
express a faithful image of the patrimony, the financial situation and the results of the companies.
These principles have their origin in the experience obtained from the solution of accounting
problems and in the laws, and must be accepted by the accountants as bases for the accounting
practice.
The Accounting Principles are developed in different countries by institutions that may be governmental or
not, which work in a coordinated manner. With the development of economic transactions, there is no doubt
that the need for them has transcended the internal areas, because due to the lack of comparability, the
Financial Statements become of little use in analyzing global economic trends.
accounting estimate

In the accounting field, it is the determination of the amount of a game in the absence of standards or criteria
that with absolute precision set the tone for a fixed or exact calculation.

The accounting estimates are usually linked to the uncertainty surrounding the consequences of events that
have occurred, or also to the occurrence or non-occurrence of uncertain events in the future.

Social managers and management have to make decisions about accounting estimates of some items,
members of the financial statements, since there are no registration and valuation rules that offer a solution for
its exact determination. From here, for the approximation of the amount of these items, value judgments will
be used inescapably.

the reporting entity that necessitates DISCLOSURE and explanation in published financial reports.

FINANCIAL STATEMENTS
The main means of reporting general purpose financial information to people outside the commercial
organization is a set of reports called "financial statements." The people who receive these reports are called
users of the financial statements.
A package of financial statements comprises four related accounting reports that summarize in a few pages
the financial resources, obligations, profitability and cash transactions of a company. A complete package of
financial statements includes:
A "balance sheet" that shows the specific data of the financial position of the company to indicate the
resources it has, the obligations it owes and the amount of equity capital (investment) in the business.
A "statement of results" that indicates the profitability of the business in relation to the previous year (or
another period)
Accountants' Report

Financial reports are used to analyze the financial situation of companies, large and small. There are four
primary financial reports that indicate the welfare of a company: balance sheet, income statement, capital
status and cash flow statement. These reports provide enough information for an accountant to forecast future
performance and recommend the changes necessary to keep a company aligned with the business plan.
Balance status
Balance sheet statements are equations that compare assets against liabilities and equity. Current assets are
inventory and accounts receivable that can be converted into cash in less than one year. Non-current assets are
properties or financial assets that will require more time to become cash. Current liabilities are liabilities
payable in one year or less and non-current liabilities are long-term debts.
Statement of income
The income statements are the financial reports that show the income obtained during a period of annual
reporting. The income statements subtract the expenses of the income for the period covered by the report,
indicating whether there was a loss or gain. A part of the profits are distributed to the shareholders and
another part is reported as retained earnings, which are reinvested in the company.

Backup Withholding

How to apply withholdings on invoices


When we talk about withholdings, we talk about a quantity of money that has to be paid, discounting it from
the total amount of an invoice, of the payroll of employees and other operations that the fiscal regulation
demands to retain. Self-employed workers and companies are obliged to apply this withholding, for which
they must pay a percentage of the total amount of the services detailed in the invoice or payroll. This amount
is entered in the Tax Agency, when appropriate. Therefore, a withholding is a fiscal mechanism, that is, a tax
that the self-employed and entrepreneurs must pay to the Treasury for each service they hire or buy. Effects of
withholdings
The effect of a withholding is neutral for both parties, that is, the payer pays the full amount of the invoice
and the withholding is paid to the Tax Agency. The one who provides the service or seller, charges the net
amount of that invoice. Once the income statement is made or the Corporation Tax is paid, in the case of
companies, the amount is returned or subtracted from the result that comes out to be paid if it is higher.
Bad Debt

Uncollectible account
An account is usually uncollectable after 180 days, or six months, of lost payments. After that period, the
company considers the money you owe as a "loss". The company can claim your money as a loss on your tax
return, according to Bankrate.
Do I still have to pay an uncollectible account?
You are still responsible for an uncollectible account. Once an account is uncollectable, it is usually sent to a
collection agency or collection department within the company. The collection agency will persistently try to
collect this debt from you. Depending on the size and type of debt, the collection agency may require your full
payment, accept to take a portion of the debt or allow you to make payments to settle your uncollectible
account, according to Bankrate.
How long does a cancellation stay on my credit report if I do not pay?
A cancellation remains on your credit report for seven years. The seven years do not start when you pay the
full debt; They start when the account was canceled. Even if the debt has been sold to a collection agency, the
time period is not restored by the sale, according to Maxine Sweet, a public educator for Experian. For
example, if you have stopped making your personal loan payments in January 2010, and the account was
canceled in July 2010, the cancellation will be removed from your credit report in July 2017, according to
Bankrate.

Balance

As is well known, the net worth of companies is the financial heart of companies. These are the items that
every analyst checks to see if the company has "future", "viability" or "strength". The letter c of section 1 of
article 36 of the Commercial Code, after its last modification, is written in the following terms:
"Net equity: constitutes the residual part of the assets of the company, once all its liabilities have been
deducted. It includes the contributions made, either at the time of their incorporation or in subsequent ones, by
their partners or owners, which are not considered as liabilities, as well as the accumulated results or other
variations that affect them. "
Obviously, not everything is reduced to net worth. A company can have its own funds (the old meaning of
this concept) robust as mountains, but a negative maneuver fund, a very low profitability or a period of too
long maturation. However, net worth is the quickest way to get an impression of the economic situation of the
company.
Bank Reconciliation

Reconciling bank account or bank reconciliation is a process that allows you to compare and
reconcile the economic values that a company has registered on an account, whether current or
savings, with their banking movements, as well as classify the auxiliary accounting book to compare
it with the extract. The bank reconciliation does not seek to legalize errors at any time, since it is a
mechanism that allows identifying the differences and their causes and then proceed to make the
respective adjustments and connections, so that in order to carry it out, clear and very precise
documents are issued for use. of the economic entity and thus make clear a balance of the
statement of account of said company.

Bank Statement

WHAT IS THE BANK EXTRACT?


The bank statement is a document that the holder of a current account can request or receive periodically in
which the available balance of the account and the movements that have been made during the last month are
collected. This statement is issued free of charge and serves to control all transactions that are carried out and
that, in one way or another, have meant a variation, whether positive or negative, in the balance of an account.

The information that the extract must offer, which in itself already covers a limited period of time in relation
to the activity of the account (from that day to that other), must include any transaction that has been
registered, however small it may be. be.
Accounting Terminology
Account Payable
Account Receivable
Accounting
Accounting Change
Accounting Cycle
Abatement
Account
Change in (1) an accounting principle; (2) an accounting estimate; or (3) the reporting entity that
necessitates DISCLOSURE and explanation in published financial reports.
Accountants' Report
Backup Withholding
Bad Debt
Balance
Bank Reconciliation
Bank Statement
Bankrupt
Base Market Value
Back office
Background
Backup
Benchmark
Beginning Inventory
Beta Coefficient
Bid and Asked
Brief
Budget
Business analyst
Bussines terms
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Capitalize
Capitalized Cost
Capitalized Interest
Capitalized Lease
Carrying Value .
Carryovers
Cash
Cash Account
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Cash Dividend
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Cash Flow to Assets
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Cash Flows
Cash Payments Journal
Card
Cafeteria Plan
Call Loan
Call Price
Callable
Callable Instrument
Capital Asset Pricing Model (CAPM)
Capital Expenditure
Capital Gain
Capital Projects Funds
Certificate of Deposit (CD)
Certified Financial Planner (CFP)
Certified Internal Auditor (CIA)
Certified Management Accountant (CMA)
Certified Public Accountant (CPA)
CEO (Chief executive officer)
Core business
Coworker
CFO (Chief financial officer)
Chief Executive Officer (CEO)
Chief Financial Officer (CFO)
Claim for Refund
Clean Opinion
Close
Closed-End Mutual Fund
Closing Entry
Cluster
CRM (Customer relation management).
Credit
Credit Agreement
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Dealer
Debit
Debit Balance
Debt
Defalcation
Default
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Empowerment
Fee
Feedback
Management
Outsourcing
Partner
Retailer, retail
Staff
Stock
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