Basic assets and liabilities
Knowledge of accounts can make life easier. If you want to invest in a new business or join your ancestral business, plan to take loans, find work in every marketing company, the desire to become a multinational company manager or have the responsibility to manage your own assets and liabilities, knowing some of the basics of accounts Being mandatory.
Widely, accounting is divided into two categories
Accounting Cash Base
Cash-based accounting relates to the management of a person's personal monetary transaction. In this case, he traces the money he pulls, is stored, gives or receives from someone etc. This accounting lives when the actual cash transaction occurs.
Accrual accounting requires an accountant who records transactions even if no money is actually exchanged. This method works on the principle of comparing or seeing the cost ratio of expenses. If more expenses, you need to reduce your luxury, if not then it's always good to have savings for the future. This type of accounting tells you the amount you are debt; This may not match the figure of your bank balance.
In Accounting language there are several key terms that someone needs to know. Some are crucially discussed below
Assets generally belong to someone who has a good or valuable market value. Assets are mainly classified into three types
Today's assets - cash are the most basic assets of each individual. Money held in accounts such as checking and savings accounts is also included in cash. Also inclusive is a securities in the form of bonds, stocks, shares, etc. Money is loaned or paid because of the client, even forming a part of it.
Fixed assets - consist of all valuable things such as property, machinery, equipment, land and the like that are not intended for sale.
Intangible assets - combine all untouched things such as copyright, patents, trademarks, etc. Which has extraordinary monetary significance.
The law of the opponent rules nature; Where there are assets, there will be liabilities. This is a debt you have to pay back to your creditors. This can be done through providing cash or other assets such as jewelry, some other items etc. More liabilities are two types
1. current liability - liabilities that must be paid back within a certain time limit and most often through your current assets. These include trading debt, namely the type of bill you have for each month, debt-loanewelles taken from the bank are intended to be repaid in 30 days and costs that still have to be paid - mandatory costs such as taxes, bills, etc. Where the bill is not accepted but each balance must be repaid.
2. Long-term liabilities - debt that can be repaid easily for a tenure of more than a month.
Financial capital - is economic capital. Is liquid media or merchandise which means wealth or other style or capital. There are four ways to manage and display financial capital. First, this capital is needed when the contract is carried out with any capital assets. Financial instruments work in the form of currencies in the case of sales, purchases or trade goods i.e. Medium exchange. Second, it functions as a media or mode that is resolved like gold for
Suspended payment standards. Third, the account unit has a market value inherent in turn varies with the country's economy. Fourth, the value source is related to financial capital that needs to be saved and restored. This is a collection of things like gold, real estate, collections etc.
Small money is an important factor in business. This is the smallest account in business settings or cash in bills and coins needed to pay a little cost.