Accounting is called the set of processes and techniques with which counts, measurements, evaluations and reviews of the state or financial and patrimonial situation of companies and public and private institutions are carried out, verifying the economic situation of any economic entity or organization, tending to help in making decisions of an economic-monetary nature carried out by the institution, contributing to the control of finances (income and expenses), with which control can be obtained over all financial operations concerning the company, dependency or organization. Accounting is usually related more to private financial evaluations of the business type.
As the centuries passed, accounting spread to other economic branches, specializing even more, not only accounting for the inflows and outflows of products, but also of money, creating records of all economic operations (accounting records). During the Middle Ages, accounting declined thanks to factors such as the disappearance of large businesses in favor of self-consumption production (fiefdoms), the decline of education with the consequent lack of people who knew how to read, write and count, as well as by the social prestige that was had when relating to accounting and economic activities, with the usury that was punished by the church. It was not until the Renaissance and the rise of commerce that the use of accounting resurfaced.
At present, the diversification of financial operations in public institutions and companies has caused the creation of specific sectors or departments to carry it out, in order to provide information promptly and accurately, since it is essential for the processes. of decision-making and the monitoring of the economic resources that an institution of a commercial or financial nature possesses, as well as those resources destined to the fiscal sphere.
Main types of accounting:
Accounting is divided into two main types, public accounting, which is responsible for carrying out operations concerning the finances and economic administration of the public sector of a country or, where appropriate, of a public institution, and private finance, which They include the finances of companies, businesses, and private institutions, as well as individuals.
Public accounting.- It is the one that is in charge of controlling and making records of all the economic operations that are carried out within the institutions of the state, as well as of the dependencies and state companies of a public nature. Public accounting makes it possible to increase the financial strength of a country, through budget changes, adjustments, reductions, cuts or increases aimed at ensuring that financial resources are used in the best possible way, avoiding waste, promoting savings and trying to avoid embezzlement to the state. , by obtaining accurate data.
Private accounting.- It is the type of accounting that is carried out within businesses, factories, and private institutions of an economic nature (such as banks), that is, of companies that are within the private sector, that is, they are in the hands of individuals, whether in the hands of natural or legal persons.
Commercial accounting.- It is the accounting in charge of reviewing the economic processes of the companies in the commercial branch, registering the transactions, income, expenses, investments and other economic and financial changes that a business is making.
Industrial Accounting.- Is one that focuses on counting, recording and evaluating production costs, income, expenses and production within industries.
Accounting of service companies.- It is the one that is focused on carrying out financial evaluations within a company that provides services, as in the case of hotel companies, or companies that provide financial services, such as banks, financial houses, exchange houses, etc. .
Administrative accounting.- It is the one that basically focuses on the internal aspects of the company, collecting the information without it leaving the company, that is, the accounting data is not transmitted beyond the company or administrative section, remaining only for the financial administration of the company or organization, this accounting information being used by the owners, directors and administrators, to judge and evaluate the performance, production and profits obtained, so that with these data strategies to be followed during economic planning can be created. of the company or entity.
Cost accounting.- Cost accounting is one that focuses on the collection, classification and management in general of accounting information, referring to current costs within a company or public institution, creating reports that are sent to the management of the company or the corresponding administrative authority, so that based on the data contained in the reports, the administration is helped with decision-making, referring to the costs for consumption of any kind within the company or institution.
Financial accounting.- This type of accounting collects the financial data of the company, data that is intended for the owners of the company or, where appropriate, for shareholders, investors and public bodies (mainly tax authorities). It presents the quantitative data expressed in monetary units (money), showing an overview of the financial situation of the company in question.
Fiscal accounting.- It is the accounting that focuses on the fiscal issues of a company, which is based on the legal criteria established by the country’s legislation, in it records and reports are made of the various economic movements of the company, income , expenses, investments, deductibles etc., to be presented before the tax authority, to determine the amount of taxes to be paid, including (if feasible), deductibles and others, to obtain the exact amounts that must be paid to the treasury by the company.