Basic accounting concepts

Accounting is a science that studies and records the financial operations of a company, with the aim of providing useful information for decision-making. It is an essential tool for the management and financial control of companies.

To better understand accounting, it is important to know some basic concepts:

• Asset: is everything the company owns that can generate future economic benefits, such as cash, inventories, machinery, real estate, among others.
• Liabilities: are the company's obligations, that is, everything it owes to third parties, such as loans, accounts payable, wages to be paid, among others.
• Equity: is the difference between assets and liabilities, that is, the value that the company actually has. It is the equity of the company.
• Revenue: is the amount that the company receives for selling products or services.
• Cost: is the amount spent by the company to produce or acquire its products or services.
• Expenses: are the expenses necessary to keep the company running, such as rent, wages, electricity, among others.
• Profit: is the difference between revenue and cost, that is, the value that the company earns from its operations.
• Loss: is the difference between revenue and cost, when revenue is less than cost, that is, the company loses money.

In addition to these concepts, it is important to highlight that accounting is divided into two main areas: financial accounting and managerial accounting. The first aims to record and present the company's financial information for external purposes, such as shareholders, investors and regulatory bodies. Managerial accounting, on the other hand, aims to provide information for the company's internal decision-making, such as financial and strategic management.

To become an accountant, you must have a degree in Accounting and be registered with the Regional Accounting Council. In addition, it is important to be up to date with accounting standards and legislation, to have skills in data analysis and knowledge in information and communication technologies.

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