AER Accounting (Misko) ITEM 3: THE HERITAGE AND THE ACCOUNTS OF THE COMPANY 1 .

The assets of the company assets of the company consists of the set of heteroge neous elements, capable of economic assessment, with which account and is a func tion of set accounting qualitatively and quantitatively the composition. Groups of assets and liabilities: Assets: are all factors of production, material or im material that the company uses to try to achieve its objectives. Rights: those l egal situations in which the company is in a position to receive. It is third-pa rty creditor. Duties: legal situations are those where the company is in a posit ion to give. Is indebted to other economic entities. Gross estate means all prop erty, rights and obligations belonging to a person or entity. GROSS ASSETS ASSET S = LIABILITIES + EQUITY RIGHTS + + = PROPERTY RIGHTS - accounting obligations a nd rights are the property assets liabilities and obligations. NET WORTH = ASSET S - Total Liabilities Shareholders' equity is also called passive unenforceable. ASSETS = Total Liabilities + NET. This equality means "the company is financed with resources provided by third parties (liabilities) and owners of the same (n et or unenforceable p.), resources spent on the property and rights (assets) nee ded to develop their activities. " Assets: set of instrumental resources appropr iate to the needs of the company. Economic structure and net liabilities: they a re funding sources that express the origin of resources. Financial structure. AS SETS = Total Liabilities + = NET OPERATING CAPITAL FUNDING SOURCES OF ECONOMIC S TRUCTURE = = FINANCIAL INVESTMENT FINANCIAL STRUCTURE 1.2 .- assets. Are the var ious assets, rights and obligations that form the heritage. Each one represented and measured by the accounts, which used some instruments called bills. Eg good s, land and natural resources, machinery, transport elements. Page 1 of 11 AER Accounting (Misko) ing 1.3 .- The pools of assets: assets, liabilities and n et worth. Assets available: a group of assets and liabilities, provided they hav e the same economic or financial functionality and that are uniform in their nat ure or degree of enforceability. or Active: comprise all assets and rights that belong to the company. Liabilities: formed by the obligations the company has. T wo types of obligations: general or debts, a loan or debt in particular: with pa rtners for their contribution Equity: This includes initial and subsequent contr ibutions made by partners to the company. Sierra MarÍa Ruz Ruiz Scheme. Materials (Construction) Fixed or Fixed Assets (> 1 year) Intangible (software) Financial (shares of another company) Inventories (raw mat erials) Assets (and rights) Circulated (1 year) Realizable (clients, Financial I. c / p) Available (Cash and Bank c / c) Pools of assets Fixed or Fixed Assets (> 1 year) Liabilities (Debt) Circulated (1 year) Not required (Capital) Net Liabilities (Payable to entities ... l / p) Related Searches Members' shares Net Liabilities unenforceable l / p. Undistributed profits Page 2 of 11 AER Accounting (Misko) 1.4 .- The situation of equity balance equity balance is

given quantitatively by the position taken by the property at any given time. On ly he will say that there is a balance where the amount of active mass is greate r than or equal to the liabilities. Maximum Stability A = NP = 0 or the asset is financed entirely by own means. Balance. Normal stability. A = P + NA, P, N> 0 o To be classified as a reasonable balance must be a relationship between liabil ities and equity. The asset is financed by means pripios (net) and external reso urces. Balance. Wrong position: A = PN = 0 or the asset is financed entirely wit h borrowed funds or liability, there being no equity. Unstable or abnormal: A + N = PN <0 o The asset is worthless. The company has no own resources. The real a sset is less than the debts of the same or liability. Imbalance. There may be in solvent. Maximum instability (bankruptcy): N = PA = 0 or the asset is totally fi ctitious and has no value. To cope with the debts he has nothing. The company in fact is in bankruptcy. 2 .- 2.1 .- Concept Accountancy has an empirical origin and responded to the nee d for registration. Accounting: as science or instrument of social and economic nature that aims at the appropriate measurement and representation of heritage, while considering static and dynamic, qualitative and quantitative€enabling kno wledge past, present and future economic reality of a company, in order to facil itate decision-making and external financial planning and internal control. 2.2 .- Accounting Division. It is divided into branches for greater depth. Macro acc ounting: study the systems macroeconomic accounting units, national and supranat ional institutions. The first difficulty is the collection of data, which can no t be individually, so it resorts to statistical estimation. Microcontabilidad: a pplies to economic units of consumption or economic units of production. Compani es (public and private sector) or Accounting consumer units or families: unless you have a great heritage is negligible. Page 3 of 11 AER Accounting (Misko) pubic accounting: public authorities, who do not seek pro fit. General Plan 1995 Public Accounting. Accounting firms: public or private se ctor, known as accounting firms, is the most developed. or or 2.3 .- Accounting firms also known as private accounts, is the most developed, t here are five branches: 1. Financial Accounting, general or external: it is the one we'll forward. a. Set of rules and techniques used for recording d operation s carried out by the company and involve changes in its assets. b. Its aim is to show the true picture of assets and liabilities, financial position and results of the company. c. These data are reflected in the financial statements: situai on balance, profit and loss accounts and memory. d. This information is for exte rnal users to make decisions in February. Cost accounting or internal analytic: it presents a partial and more information aimed at managers in order to provide data for decision making. a. It owes its name to the calculation of costs of pr oducts and services. 3. Analysis of financial statements. Try to give an opinion on the financial and economic situation of the company through sumistrada infor mation by financial accounting. a. The analyst interprets the facts contained in the records. b. Objective: To analyze whether the company has funds for its eas e and if properly distributed. Analysis in the short and long term. c. The analy sis should include: i. Economic profitability (return on capital employed) ii. F inancial profitability (return on shareholders) 4. The audit of accounts, is the activity of the review and verification of accounting records, if that is inten ded to issue a report that may have effects on others. a. Should be carried out by people with training and professional capacity and should be listed in the Of ficial Register of Auditors and Auditors. b. The position of the auditor is of a bsolute independence, integrity and objectivity. c. Deliver its opinion on the e xtent to which the accounting officer of the company meets its goals. 5. Consoli dation of financial statements. a. The preparation of consolidated accounts for

the company to parent. Be part of the annual accounts of companies perimeter of the building and the degree of social equity and the gression, we get the accounts of the group. b. Understand and form alance ii. Profit and Loss Account iii. Consolidated Report Page 4

that form the process of ag a unity. i. B of 11

AER Accounting (Misko) c. Must faithfully reflect the assets, liabilities, finan cial position and overall Resusta. d. Where no one dominant, the obligation appl ies to society's greatest asset on the date of first consolidation e. Habra deci sion unit where there is a parent company or more companies dominated. 3 .- Acts Done Accountants accounting or property means any economic event that affects the amount or composition of the assets of the company directly and spec ifically. Not all economic events are countable, since not all the assets change . Rating 1 / in terms of the components / Simple: those events in which only inv olves two assets. / Payment of ⠬ 1,000 in cash from a client / Composites: those in which involved more than two elements of capital. Rating 2 / Depending on th e economic and financial estrutura / Expansive: those who make greater economic and financial structure of the company. / Loan 1000. Increase Safety and Passive / Reductive: those who make less economic and financial structure of the compan y / Pay a supplier / Neutral: those that leave invariant the economic and financ ial structure of the company.€/ Pass 1000 cash to banks / 3rd Classification / versus modified net asset / permutations are those that affect or alter the asse ts, liabilities or net without changing the net asset / debt repayment, cash pur chase / Modified: are those that alter the amount of equity, is aumentadolo or d ecreasing. / Sale of a service or sale of furniture for different values / ex: c redit purchase of furniture: Simple Expanding exchangeable 5 .- The account. Definition 5.1 .- Count: is the basic element used by the doub le entry accounting to represent and measure quantitatively the situation and de velopment of an asset or liability, regardless of the progress and status of oth ers. That is, the identity card of each element are recorded heritage where all the movements that affect them. There will be many accounts as assets. Page 5 of 11 AER Accounting (Misko) 5.2 .- Structure of the account The account captures the initial value of assets and liabilities and the subsequent changes that occur. B e known as the element it represents. Be separated decreases increases. It is re presented by T. Left, must increases. Right, he declines. 5.3 .- Classification of accounts. The accounts are grouped following the same p attern that the assets accounts asset: assets and rights represent liabilities A ccounts: Liabilities represent financial resources: Not required obligations: ob ligations to partners. Accounts differences or income and expenses. Income: Thes e are the amounts the company charges for the provision of facilities, and are k nown as operating income. Asset inflows pose Expenses: are amounts paid to third parties as a result of acquisition of productive factors inherent in the activi ties of the company and necessary for the income. The spending is an investment. Extension of the fundamental equation of the estate. Assets = Liabilities + Net + (revenue - expenses) = assets + expenses = liabilities + net + income 6 .- Ope rating Agreement of the accounts are grouped into asset accounts, liabilities an d net. According to belong to the economic or financial. The accounts have an op posite function. Convention: (this is the chops) ⠢ ⠢ ⠢ asset accounts: the initi al value of the assets and rights and their increases were recorded in the debit and the credit declines. Liability accounts, net: the initial value of the asse ts and liabilities and their increases were recorded in the credit and decreases on the debit. Accounts differences: income are recorded on the credit and the e xpenses on the debit. Income and expenses resulting creditor debit balance. Page 6 of 11

AER Accounting (Misko) 7 .- Terminology and basic concepts. Seat: any notation i s made in the journal. Open an account: is to devote a ledger sheet to it, givin g it the title of capital which until then had not appeared. Upload, debit or de bit an account: make an entry in the debit. (Left) Accreditation, paid or date a note: practicing a note on the credit or right of it. Account balance means the difference between the sums of the amounts due and the credit. o If D> H debits or if D <H credit balance or if D = H Settle a zero balance account: note the b alance of the side that less adds, to balance it. Closing an account. Consists o f adding both sides (debit and credit) to the total height, after you have paid off. Debit account, that by nature has a debit balance. Accounts Payable: that b y nature has a credit balance. 8 .- The accounting books. According to the Comme rcial Code "every employer shall keep proper accounts, appropriate to their acti vity, allowing a chronological tracking of all operations, and a regular product ion and inventory balances. Besides a book of inventories, annual accounts and o ne every day. "Mercantles societies also take a minute book. 8.1 .- The journal. In chronological order is recorded and periodically all operations of the produ ction cycle affecting the property or results. Should be recorded every day, but those entries are valid for all joint operations period not to exceed the month and are detailed ledgers. The American Journal is the most used. In each entry must match the sum of the amount of credit. Due to the method of double entry. M UST SEAT REF CODE DATE AND NAME OF THE ACCOUNT CODE REF HABER 8.2 .- The Ledger has the function of classifying information in the diary for asset s.€Reflected in the daily accounting events in order of date and the highest fo r any account (according to order of appearance) MUST CODE NAME ACCOUNT HA BER Page 7 of 11 AER Accounting (Misko) 8.3 .- Book of inventories and balances are reflected in the inventory made by the company periodically, the balance sheet, the profit an d loss account and the memory made at year end, as well as balances verification (quarterly). 8.3.1 .- The inventory is a detailed account of the various consti tuents of the assets of a company, properly valued, at a given time. According e xtension: General: Partial include all assets: only part of the assets include i nventory Parties: Heading: company name, where performed, date inventory and bod y type: divided into active, passive and abstract. It has detail each item. It j oins and quits the amount of each part with two horizontal stripes. Finally ther e is the difference between assets and liabilities to secure the net. Pie or cer tification: You end up with a measure to be signed by the employer and it is rec orded in the net asset letter and the results obtained. 8.3.2 .- Balance check. Its objectives: Check that the data collected in chronological order, in the new spaper and classified in the general ledger, contain no quantitative judgments. This verification must be periodic. Ensure all accounts have been passed to the general ledger properly. It allows us to get a rough idea of the economic situat ion of the company at any given time, this being very useful to calculate the pr ofit or loss. 8.3.3 .- Balance Sheet, the consolidated profit and loss and memor y. Annual accounts are called, form a unit and must be made by the employer or a dministrator within a maximum period of three months at year-end. 9 .- Accountin g Standards and planning. The accounting standards sought by the making of a gen eral model applicable to all types of businesses, and is useful both to the comp any and third parties related to it. It can be promoted by public or private or appearance of a chart of accounts: information model and against a particular ec onomic reality. This at first was voluntary until it entered the EU and had to b ring the trade legislation, New Plan G. We had expected. Page 8 of 11 AER Accounting (Misko) 10 .- Requirements to be met accounting Understandable: t he information must be easily understood by users, within the complexity of the

economic world. Relevant: it must contain the information more meaningful to use rs (not too much information) Reliable: no significant errors in the information provided 11 .- Structure of the general accounting plan Parties: Basic accounti ng chart of accounts and accounting records Definitions (defines groups of accou nts table) Annual 11.1 .- Valuation rules accounting principles for the informat ion provided by reliable financial statements for external users and allow them adequate decision-making, should provide fairly the assets, the situation financ ial and business results. The application of the principles should lead to these objectives: (see detailed pag 29) 1. 2. 3. 4. 5. 6. 7. 8. 9. Principle of prude nce principle of accounting risk Principle Principle of the purchase price accru al basis principle of correlation of income and expenditure Principle Principle of non-uniformity compensation Materiality principle Table 11.2 .- Account Pick up a list of accounts to use and follows the decimal classification. It is divided into seven groups (1 to 7). From 1 to 5 cash accou nts. 6 and 7 revenue expenditure accounts balance .- Core funding G.1 G.2 G.3 ..- Fixed Assets Inventories G.4 .- Creditors and debtors traffic operations man agement accounts Financial accounts 6. Purchases and expenses 7. Sales and incom e 1. 2. 3. 4. 5. Page 9 of 11 AER Accounting (Misko) 11.3 .- Definitions and accounting records. G.1 .- Core f unding: own resources and sources of funding long-term business. And all the lon g-term debt. G.2 .- Fixed assets: capital items intended for use on a continuing basis for business activity G.3 .- Stock: goods, raw materials ... well stored and which are the subject of business activity G.4 .- Creditors and debtors by t raffic operations: personal and commercial accounts assets and liabilities that are caused by the traffic of the company.€Financial accounts: accounts payable and receivable for operations outside the traffic of the company's short-term pu rchases and expenses: supplies and expense. Sales and revenues: service delivery and asset disposal. (Operating income 11.4 .- Annual Accounts. This is where al l the accounting information summarizes the financial year and will be made avai lable to external users. They form a unit and must be clear and faithful to the image of the company. Balance Location: includes property and rights that are th e assets of the company and the obligations and capital liabilities which are th e same. Profit and Loss Account: includes revenue and expenditure for the year a nd the outcome. Memory: must complete , expand and comment on all the informatio n contained in the balance sheet and the profit and loss account. Includes finan cing table sets out the resources obtained in the exercise and their different o rigins. 11.5 .- Valuation rules. These rules develop the principles accounting a nd contain the criteria and implementation rules for transactions, as well as va rious assets. are mandatory. 12 .- Summary of the accounting process. economic p rocess: one that has occurred since the creation of a company until its demise, develops continuously and without stopping. Process accounting: one that runs pa rallel to the economic and whose mission is to capture and represent the economi c process. In this whether there are interruptions, financial periods, artificia lly introduced, which simulate a stay of activity and regularly provides informa tion to users. It aims to establish periodically the assets of a company and the result obtained. Each cycle begins with the first operation of each period and ending with the preparation of financial statements. ( usually one year) Opening of accounts Page 10 of 11 AER Accounting (Misko) Representation of the operations of the period or Trial B alance balances Result for the exercise or establishment Accrual accounting or h ypothesis or summary of everything posted in the exercise or closing of the acco unts (page 34 in detail) Page 11 of 11