Definitions of basic concepts and basic accounting operations;
Major headings of accounting are assets, liabilities, capital, income, expenses, withdrawals
Second part: Debt
Obligations that an institution has to other persons and institutions and that arise from past transactions and events and must be settled through payment of money, delivery of goods, performance of services or transfer of other property items are called “liabilities”. Debts usually come from buying assets on credit, taking loans, paying taxes, and paying damages to others.
Debts can be divided into two main groups.
Current debt or short-term debt: are debts whose payment period is less than one financial period. Such as accounts payable, creditors, accounts payable, advances.
Fixed debt or long-term debt: These are debts that are due for more than a year. Such as bonds, mortgage debt, long-term bank loans.
Among the main components of debt, the following can be mentioned:
1. Accounts Payable: The institution’s debts to others for which a check, promissory note or bill of exchange has not been delivered are called accounts payable.
2. Payable documents: The debts for which the institution has handed over checks, promissory notes or bills to creditors are called payable documents. If the maturity of the payable documents is one year or less, it is classified as short-term payable documents and if their maturity is more than one year, it is classified as long-term payable documents.
3. Payable loan: The amount that the institution has received from banks and credit institutions and must be repaid within a certain period in installments or in one lump sum, is called a payable loan. If the payment period of these loans is longer than one financial period, they are registered as long-term loans.
4⃣ Pre-receipt: When the institution receives money from others before delivering goods or providing services, it is called pre-receipt.
5⃣ Creditors: Creditors’ account balance means the amount of individuals’ demands indicates the obligations that result from credit purchases.
6. Bonds: If the company has committed to work, but the capital of the company is not enough to do the work, it must take help from the capital of other people, it distributes papers to people and gives them interest for issuing each paper, and these papers are called bonds. It is included in the accounts.
7⃣ Mortgage debt: The demand that the institution has to pay to the owner of that place for having a workplace.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
The group of accountants and auditors of Tabriz
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This post is written by Mahdi_kohsoltani