Definitions of basic concepts and basic accounting operations;

Definitions of basic concepts and basic accounting operations;

Major headings of accounting are assets, liabilities, capital, income, expenses, withdrawals

Third part: other accounting concepts and operations

Reinvestment: If the owner or owners invest cash or non-cash amounts in the institution after the formation of the institution, it is called reinvestment.

Account: Information related to each element of the basic accounting equation is recorded in an account. Therefore, the account is like a container in which the information related to each of the assets, liabilities and capital is kept.

Financial events: There are events that have a financial effect. In other words, financial events are events that affect at least one element of the basic accounting equation of assets, liabilities and capital.

Among the elements of the basic accounting equation, accounts related to assets are debtors and accounts related to liabilities and capital are creditors. In this sense, income accounts have a credit balance, similar to the capital account, and expenses, unlike the capital account, have a debit balance.

Financial period: the actual results of the institution’s operations, accurately and definitively, can only be determined at the end of its operation and after the collection of claims, sale of assets and implementation of obligations and payment of debts. But the users of financial information can’t wait until that time to get the information one year. Therefore, the long life of an institution is divided into shorter equal time periods and separate financial reports are provided for each period. These time periods are called financial period or accounting period.
Every financial period equal to a full year is called a financial year.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
Group of accountants, auditors, Tabriz
https://t.me/joinchat/BnzBsTuioTshiXBwf9bBPQ

This post is written by Mahdi_kohsoltani