For people far from accounting, it is difficult to understand the joy of an accountant who finally managed to balance the balance! Why do situations occur when the Asset and the Liability cannot converge in any way, and why is it necessary for them to converge?
Accountant's ABC
In order to effectively conduct business and make the right management decisions in time, you need to track business processes and ongoing business operations in the current time. To do this, the data from the primary documentation is grouped into accounting accounts, why this data is systematized, analyzed and the management of the enterprise is able to draw conclusions about the results of their efforts.
Accounting is based on the principle of double entry: each business transaction must be reflected in the Debit and Credit of accounts, i.e. acquisitions must be equal to expenses. It cannot happen otherwise, since the means pass from one state to another, but they cannot arise out of nowhere and disappear without a trace. It is on this principle that the entire accounting system is built, and the very concept of "balance" means equality when this rule is observed.
Each business transaction affects two accounting accounts: if funds are received at the cash desk, the source of their receipt must be indicated; When these funds are spent, the category of expenses is reflected in the accounting: whether it is a payment to the supplier, the salary of an employee or tax payments - for each of them there is a category in the Plan of Accounts. In addition, the double entry principle excludes the possibility of an accounting error: if it does occur, the balance cannot be brought together.
How to find errors in accounting?
All accounting errors are of two types: intentional and unintentional, but more often than others, the following system errors are made:
- during initial accounting, when transactions are recorded in the accounting without appropriate documents;
- in case of untimely reflection in the accounting.
- when drawing up incorrect entries. In this case, accounting data is distorted;
- in the assessment, may be associated with violations in the rules of primary accounting, the calculation of the amount of depreciation deductions;
- specific errors can occur when computers malfunction, when using incorrect accounting programs, when there is a sudden power outage, when malicious computer programs are introduced into the system.
In all cases, the most effective method to find errors in accounting is to conduct an inventory, when the actual balance is reconciled with the accounting. In this case, it is possible to reveal the facts of incorrect registration of values and theft. Conducting reconciliation with counterparties on the arrival and consumption of inventory items will also help.
When compiling the balance sheet manually, an experienced accountant can "by eye" see incorrect transactions, as well as track the movement of funds on debit and credit accounts. In addition, it is useful to apply the method of logical control, with the creation of "control points", the values of which in the correct reporting must match.
