What is an accounting entry? Definition, model accounts, compilation procedure

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

All legal entities and individual entrepreneurs need to document and reflect business transactions. The legislation of the Russian Federation obliges them to keep accounting records in all cases, except for those prescribed in the Federal Law N 402 “On Accounting” dated December 6, 2011. The definition of the concept of “accounting entries and accounts” often confuses people without accounting and economic education. Therefore, almost always individual entrepreneurs and founders of small companies hire an experienced accountant either for a permanent period or resort to his services from time to time. Novice accountants also often do not fully understand the essence and meaning of these simple terms. What is an accounting entry? In the article, we tried to consider the definition as detailed as possible.

What is the concept of "account"?

Accounting account is a certain position in accounting, which reliably reflects the movement of the organization's property, as well as ways to replenish it. In simple terms, you can compare the account with a honeycomb in a beehive. Accounting consists in fixing all the nectar entering this cell and at the same time taking into account its losses for one reason or another. In a hive (which can be compared to an organization) there are many such cells (accounts), each of which has certain features.

In modern accounting, for a simple and understandable reflection of account transactions, the double entry method is used. It is so named because each operation is reflected twice. Any cash flow must be reflected twice: on the debit of one account and on the credit of another.

All the variety of accounts that are used by an accountant when keeping records in commercial organizations are grouped and systematized in a special way in the Chart of Accounts. Accounting entries in this case play the role of single transactions, which represent a reflection of the receipt or departure of funds to the account. Inexperienced accountants, as a rule, always keep a Chart of Accounts at hand, so as not to make mistakes and not to correlate the receipt or expenditure of funds with the wrong account.

There is also such a thing as a subaccount. For example, 10.1, 50.2 and others. These sub-accounts allow you to refine the information reflected in the main account.

Classification of accounts and features of postings on them

Accounts are classifiedas follows (depending on the object to be displayed in accounting):

1. Active are a way to display in monetary terms information about how much and what funds and resources an organization owns. The most commonly used active accounting entries are: materials (10), finished goods (43), sales expenses (active credit account 44), fixed assets (01) and many others. The peculiarity of active accounts is that the opening and ending balances on them are reflected only in debit. At the same time, transactions during the month that contribute to an increase in the organization's funds are recorded in debit, which contribute to a decrease - in credit. These entries, carried out by means of accounting programs or manually, are called postings.
2. Accounting accounts of a passive type reflect the state and changes in the sources of income of the organization. For example, depreciation of fixed assets (02), authorized capital (80) and many others. When working with passive accounts, it is important to remember that the opening and closing balances are reflected in the loan. At the same time, transactions during the month that contribute to an increase in the size of the account are recorded in credit, and those that contribute to a decrease are debited. This principle is used when compiling any transactions with passive type accounts.
3. Active-passive accounts are often difficult to understand and make entries on them for a novice accountant. Depending on the circumstances, such accounts can be either passive or active. In order to distinguish which type the account will be inIn each individual case, it is important to determine which account attribute is triggered during posting. The accounting chart of accounts distinguishes the following active-passive accounts: settlements with debtors and creditors (76), calculations for taxes and fees (68), etc. When generating entries on active-passive accounts, the figure can be reflected both in debit and in loan.

In the past, when there were no special programs to facilitate the work of an accountant, accounting specialists were forced to do calculations on paper. Accounts were depicted in the form of plates with two columns, the left one reflected the debit, and the right one - the credit. In the common people, such billboards were called airplanes.

What is an "accounting entry"?

Regardless of the nature of the financing of the institution (budgetary or commercial organizations), a lot of money transactions go through its accounting department every day. What is an "accounting entry"? This is a transaction that can reliably reflect profits, costs, expenses, etc. Roughly speaking, a posting is an entry in a cash transaction program.

The economic activity of an institution is displayed using the double-entry method. It is so named because the accounting posting plan has only two columns: debit and credit. The first reflects income, the second (loan) reflects the expenses of the organization.

The most common postings

What accounting entries are used most often in accounting? Give unambiguousthe answer is difficult - it all depends on the area in which the organization operates. For example, if a company is actively engaged in trade and production, then the accounting department is regularly forced to use the following postings:

• D41 - K60, 71, 75 - receipt of products for sale.
• D41 - K42 - reflection of the trade margin.
• D73, 94 - K21, 41, 43 - shortage accounting.

Chart of accounts and accounting entries are closely related. In order to quickly and competently draw up transactions, it is advisable to know the Chart of Accounts by heart. Inexperienced accountants always keep it at hand, as they may unknowingly record the operation on the wrong account, and as a result, there will be problems with the balance at the end of the month and the balance sheet.

Classification of transactions

You can classify transactions according to the nature of the transactions recorded as follows:

• real are used to reflect the actual transactions made during the reporting period;
• conditional serve to reflect such transactions that were not actually committed, but should be reflected in the accounting (for example, clarification and transfer of indicators - the inclusion of management costs in production costs);
• clarifying - to reflect corrective operations. Clarifying entries in accounting are divided into additional and reversed. The former exceed the amount of turnover on accounts, the latter should be deducted when calculating the totals for the reporting period.

The whole variety of transactions can be divided into two types: simple and complex.

1. Complex entries are entries that involve accounting for transactions in more than two accounts.
2. Simple transactions reflect transactions that reflect the movement of funds in only two accounts.

Accounting for fixed assets

Fixed assets are on the balance sheet of any institution, no matter budgetary or commercial. It is customary to refer to fixed assets all property that is involved in the implementation of activities. Fixed assets can be borrowed or leased. Office building, cars, commercial equipment - these are all fixed assets. But stationery will be taken into account already on the “Materials” account.

What is the accounting entry for the Fixed Assets account? This is a transaction that reflects the purchase or sale of buildings, cars, commercial equipment, etc. Consider the accounting entries for this account.

Postings and accounts for OS accounting

Active accounts 01 and 08 are used for accounting. The peculiarity of accounting and drawing up a posting is that when fixed assets are received at the disposal of the organization, the entry is not immediately made to account 01. First, the receipt is reflected in the debit of account 08.

• 08-60 - this is how the transaction will look when purchasing property.
• 01-08 - this should reflect the fact that the fixed assets were put into operation.
• The fixed asset can be donated, in which case the transaction will belook like this: 08-98.
• If the fixed asset is contributed as part of the authorized capital, then the entry is as follows: 08-75.
• A fixed asset (for example, a building) can be built by the labor of hired workers, in this case, the wiring is as follows: 08-60.

Accounts and accounting entries for accounting for intangible assets

The main account for accounting for intangible assets is 04. It belongs to the group of active accounts. Its purpose is to reflect the presence and migration of intangible assets. Many accountants believe that, according to the principle of reflecting transactions, account 04 is similar to account 01. However, there are differences in the compilation of postings. The chart of accounts reports that the acceptance of intangible assets on the balance sheet is always reflected in account 04. When accounting objects are retired from the balance sheet, the amount on credit 04 of the account should be reflected.

Examples of transactions with account 05:

• 05-04 - depreciation of an intangible asset due to sale, donation, liquidation, etc.;
• 04-08 - the facility has been put into operation;
• 04-79 - reflection of the receipt of an intangible asset in trust management;
• 58-04 - the residual value of the intangible asset has been written off.

Inventory Accounting

Almost every institution in one way or another is faced with the need to purchase materials. They tend to be of low value and are almost never resold. Postings on the movement of materials are displayed on account 10. It hassubaccounts, for example:

• 10.1 - raw materials;
• 10.3 - fuel;
• 10.5 - spare parts;
• 10.8 - building materials;
• 10.10 - special equipment.

Experienced accountants memorize all sub-accounts and are able to easily make entries for 10 accounts. This is one of the most commonly used postings. The chart of accounts reports that the cost of materials is recorded on the balance sheet at actual cost.

Production Cost Accounting

Production costs are reflected in account 20. What is it? In simple terms, production is the process of creating the cost of goods and products. The cost price, in turn, is the sum of all production costs (including payment to workers, purchase of raw materials, etc.) and implementation (payment for a trading place, work of promoters and marketers). All these expenses are recorded in the debit of account 20, forming the cost price.

When compiling entries related to production costs, the following accounts are also used:

• 23 - auxiliary production;
• 26 - general business expenses;
• 25 - overhead costs.

These accounts are auxiliary and rarely used. If the organization is relatively small, then it makes no sense to enter additional accounts in the transactions, you can limit yourself to using account 20.

Accounting for personnel settlements

Even the smallest organizations have employees who need tosomehow calculate wages, allowances and bonuses to it, deduct amounts for damaged materials and damage caused, and somehow reflect these costs in the balance sheet. All types of settlements with employees of the organization are reflected on account 73. Also, this account may reflect the costs associated with employee loans from the enterprise, the amount of material compensation to employees from the institution, etc.

What postings are made on account 73? Most common:

• 73-50 - loan issued to an employee;
• 73-94 - material damage written off on the guilty employee;
• 50-79 - the employee compensated the damage caused to the cashier.

How to quickly learn accounting entries?

Beginning accountants try to memorize accounts and postings on them. As a result, everything is confused in the head, and they make unforgivable mistakes. It is much easier to understand the essence, to realize the importance and necessity of this or that account in tandem with postings. Accounts should be grouped according to the principle of use, so it will be easier to remember them, for example:

• inventory accounts - 01, 21, 41, 43;
• cash accounts - 50, 51, 52;
• expense accounts - 20, 23, 25;
• financial result - 90, 91, 99.

It is also important to understand the basic principle of accounting entries. Always on the left is a debit, on the right is a credit. Based on the results of making all entries for the reporting period, a balance sheet is formed. Any person with highereconomic education will be able to draw from this document a lot of important information about the organization. For example, how much materials were purchased for the reporting period, how much the organization incurred in general and in particular for one or another item of expenditure, the amount of proceeds for goods sold, how much money the organization owed to suppliers, and much more. In general, it is quite simple and realistic to implement.