Geoeconomia

Sistemele comunicaţionale ale Terrei

Aspecte generale ale sectorului terţiar. Modificări in comerţul mondial

Sectorul terţiar sau al serviciilor cuprinde toate tipurile de servicii, iar denumirea de „terţiar” vine să releve caracterul mai indepărtat al activităţilor economice faţă de resursele naturale, avind menirea să asigure desfăşurarea normală a activităţilor din sectoarele primar şi secundar. Terţiarul sau serviciile sunt activităţi economice care intervin după procesul de producţie şi care oferă, indivizilor şi comunităţii, valori de intrebuinţare (cu excepţia bunurilor materiale) necesare satisfacerii cerinţelor umane. Caracteristica activităţilor terţiare este extrema diversitate, definirea şi clasificarea lor fiind dificilă.

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De la economia socialistă la cea de piaţă in Europa centrală

Ţările foste comuniste au fost ţările care, după cel de-al II-lea Război Mondial au intrat in sfera de influenţă a URSS, fiind obligate la un experiment dramatic, acela al construirii socialismului, experiment soldat cu un eşec economic şi cu milioane de victime omeneşti. Ele au fost atat ţări europene (Polonia, Cehoslovacia, Ungaria, Romania, Bulgaria, republicile baltice), cat şi ţări asiatice (Vietnam, Mongolia, Coreea de Nord), majoritatea dintre ele devenind membre ale unei organizaţii de integrare creată de URSS in anul 1949, Consiliul de Ajutor Economic Reciproc (CAER).

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Suntem ceea ce mancam

Medicii lucreaza pentru a ne mentine sanatatea, iar bucatarii, ca s-o strice. De cele mai multe ori, ultimii au mai mult succes.

Diderot

În cursul vietii, un om consuma 40 pana la 50 de tone de alimente. Deci, nu e de mirare ca obiceiurile alimentaresunt decisive pentru sanatatea noastra. Iar datele stiintifice atesta faptul ca alimentatia vegetariana se însoteste de mai putine riscuri pentru sanatate decat cea cu produse provenind de la animale. Exemplele în privinta aceasta sunt foarte numeroase.

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Contabilitatea vânzării mărfurilor din unităţile de comerţ cu ridicata

Vânzările de mărfuri , ambalaje şi prestări de servicii specifice activităţii de comerţ, generează venituri din activitatea operaţională. Acestea sunt reprezentate de sumele sau valorile încasate sau de încasat din operaţiuni de livrări – vânzări de mărfuri sau de prestări de servicii, executări de lucrări. În concepţia contabilă actuală înregistrarea veniturilor se realizează în momentul angajării lor şi nu în momentul încasării efective ale acestuia.

Din aceste considerente vânzările brute (globale) sunt alcătuite din:

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Sanatatea cere respectarea unor legi

De pe varful muntelui, urnesc un bolovan care începe sa se rostogoleasca spre vale, din ce în ce mai repede. Nicicand un bolovan nu va urca de la sine spre varful muntelui. De ce? Din cauza gravitatiei, desigur. Gravitatia e o forta care exista în materie. Lucrurile se atrag cu o forta proportionala cu masa lor. Asa se face ca formidabila putere a pamantului atrage bolovanul catre centrul lui. Atat de constanta, de sigura, de previzibila si de absoluta este gravitatia, încat e una dintre „legile naturii”, asa cum a fost ea descrisa de Newton, un fapt care e deasupra oricarei pareri sau oricarui punct de vedere, sfidand orice controversa.

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Specificul organizarii activitatii bancare

Esenţa si particularităţile acţivităţii bancii ca instituţie financiară

Economia de piaţă presupune existenţa unui sistem bancar care trebuie să asigure mobilizarea disponibilităţilor monetare ale economiei şi orientarea lor spre desfăşurarea unor activităţi economice eficiente şi rentabile.

Banca poate fi definită ca o instituţie care mobilizează mijloace băneşti disponibile, finanţează şi creditează persoanele fizice şi juridice, organizează şi efectuează decontările şi plăţile în cadrul economiei naţionale şi în relaţiile cu alte state în scopul obţinerii de profit.

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Cartoful

În Muntii Anzi, America de Sud, la altitudinea de peste 2.000 de metri, deasupra liniei de cultura a porumbului indian, incasii detineau vaste bogatii naturale, de o valoare incalculabila, îngropate în pamant. Cand au sosit conchistadorii spanioli, la începutul secolului XVI, tinta cautarii lor erau minele de argint. Totusi cu mult mai valoroasa decat argintul sau decat aurul era modesta planta papa, cunoscuta de noi sub denumirea de cartof.

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Jean Baptiste Say continuator şi sistematizator al doctrinei smithiene

Jean Baptiste Say (1767-1832), economist de origine franceză, este adept şi promotor al ideilor liberalismului clasic. Admiraţia sa pentru ideile cuprinse în lucrarea "Avuţia naţiunilor" a lui Smith şi influenţele exercitate de acesta asupra oamenilor de ştiinţă l-au determinat pe Say să încerce sistematizarea ideilor smithiene în lucrările: "Tratat de economie politică"(1803) şi "Curs complet de economie politică practică" (1828-1829).

În lucrările sale, Jean Baptiste Say reia concepţia economică a lui Adam Smith, o sistematizează şi o ordonează logic, îi relevă principiile generale ale căror consecinţe "aproape că se deduc singure".

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Operaţiunile de piaţă

Caracteristicile iniţierii ofertelor publice

În categoria operaţiunilor de piaţă se includ ofertele publice de vânzare, de cumpărare şi de preluare, acestea din urmă fiind o formă specifică a ofertei de cumpărare. Transparenţa informaţiilor şi publicitatea reprezintă un element definitoriu pentru toate tipurile de ofertă publică.

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Evidenţa creanţelor privind veniturile calculate

Creanţele privind veniturile calculate cuprind datoriile altor întreprinderi faţă de unitatea economică respectivă privind:

  • plata de arendă,
  • dividendele calculate,
  • dobînzile şi redevenţele calculate,
  • alte venituri.
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Evaluarea şi constatarea consumurilor şi cheltuielilor

La contabilizarea cheltuielilor apar două probleme principale:

  • determinarea (evaluarea) cheltuielilor, adică calcularea sumei acestora care urmează să fie reflectate în contabilitate şi rapoartele financiare;
  • constatarea cheltuielilor, adică stabilirea perioadei de gestiune în care acestea trebuie să fie reflectate în contabilitate şi rapoartele financiare.
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Formarea cursului pe pieţele bursiere

Ca pe orice piaţă, la bursă cursul titlurilor financiare preţul curent al acestora se formează prin confruntarea directă a cererii cu oferta. Specific bursei este însă faptul că acest proces se realizează după o procedură aparte definită în regulamentul instituţiei prin intermediul unor firme specializate societăţile de bursă şi al unor persoane calificate în astfel de tranzacţii, agenţii de bursă.

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Resursele atrase ale băncii

Componenţa resurselor atrase ale băncii

Reieşind din funcţia de intermediere financiară băncile comerciale nu pot să-şi desfăşoare activitatea de creditare fără a atrage resurse financiare de la populaţie şi agenţi economici (firme, alte bănci comerciale, banca centrală). Resursele atrase reprezintă totalitatea mijloacelor băneşti care sunt utilizate de către bancă în procesul desfăşurării activităţii, dar care nu-i aparţin cu drept de proprietate şi care necesită rambursare.

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Produsele cerealiere integrale nu sunt vatamatoare

Nutritionistii sunt de acord ca produsele cerealiere integrale, indiferent daca e vorba de paine integrala, paste fainoase, orez nedecorticat, mamaliga, fulgi de ovaz, cereale fierte (boabe întregi sau crupe), furnizeaza baza alimentatiei noastre, toate componentele lor avand o actiune favorabila asupra sanatatii. Creatorul stia ce combustibil si ce lubrifiant necesita organismul uman.

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Proiectarea cercetărilor de marketing

După parcurgerea acestui capitol va trebui să înţelegeţi rolul fundamental al activităţii de cercetare de marketing în cadrul procesului decizional al organizaţiei;

  • Să înţelegeţi care este conţinutul cercetărilor de marketing;
  • Să definiţi principalele tipuri de cercetări de marketing;
  • Să fiţi în măsură să alegeţi tipul de cercetare corespunzător în funcţie de natura problemei decizionale;
  • Să cunoaşteţi ce etape se parcurg în cadrul procesului complex al cercetărilor de marketing.
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Importanţa pieţelor de capital în cadrul pieţei financiare

Pieţele de capital sunt specializate în domeniul tranzacţiilor cu active financiare pe termen mediu şi lung. Aceste titluri financiare sunt reprezentate în principal de acţiuni şi obligaţiuni. Pe piaţa de capital apare o relaţie directă între posesorul de fonduri (investitorul) şi cel aflat în căutare de resurse financiare şi care va emite titluri, urmând ca în schimb să primească fondurile de care are nevoie. În literatura de specialitate, se folosesc de către unii autori noţiuni diferite pentru a descrie structura pieţei.

Spre exemplu, în literatura franceză, în locul noţiunii de piaţă financiară se foloseşte cea de piaţă a capitalurilor, aceasta incluzând piaţa creditului, piaţa valorilor mobiliare (numită în acest caz piaţă financiară) şi piaţa monetară. Piaţa de capital este structurată în două segmente diferite, dar interdependente: piaţa primară şi piaţa secundară.

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Pieţe financiare

Necesităţile de existenţă ale individului, ca şi cele de existenţă şi funcţionare ale grupurilor sociale şi ale societăţii in ansamblul ei sunt satisfăcute in economia de piaţă, intr-o măsură covarşitoare şi de o manieră quasigenerală, pe baza cererii şi ofertei. Un gen de necesităţi il reprezintă nevoia de bani, in particular de capital. Nevoia de bani este determinată de consum, in cazul populaţiei, şi de dorinţa de a iniţia sau continua o afacere, in cazul intreprinzătorilor, situaţie in care se vorbeşte de nevoia de capital.

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Structura lexicală a limbajului Java

Setul de caractere

Limbajului Java lucrează în mod nativ folosind setul de caractere Unicode. Acesta este un standard international care înlocuieşte vechiul set de caractere ASCII si care foloseste pentru reprezentarea caracterelor 2 octeti, ceea ce înseamna ca se pot reprezenta 65536 de semne, spre deosebire de ASCII, unde era posibila reprezentarea a doar 256 de caractere. Primele 256 caractere Unicode corespund celor ASCII, referirea la celelalte facandu-se prin \ uxxxx, unde xxxx reprezintă codul caracterului.

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Controlul execuţiei

Controlul executiei

Instructiunile Java pentru controlul executiei sunt foarte asemanatoare celor din limbajul C si pot fi impatite in urmatoarele categorii:

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Obligaţiunile

Caracteristici ale obligaţiunilor

Obligaţiunea este un înscris care certifică deţinătorului său calitatea de creditor. Ea reprezintă un titlu de creanţă negociabil. Sunt titluri reprezentative ale unei creanţe asupra emitentului care poate fi statul, un organism public sau o societate comercială. Dau deţinătorului dreptul de încasare a unei dobânzi şi vor fi răscumpărate la scadenţă de către emitent, investitorul recuperându-şi capitalul avansat în schimbul obligaţiunilor.

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Geoeconomics

The legacy of the discipline of geopolitics

The disciplines of geoeconomic and geopolitics are closely intertwined. The discipline of geopolitics has a burden full past and can only progress through self-critique: that is through criticism of the discipline itself. For instance, it must be made clear what in geopolitics is objective and what is normative. So far this criticism has come mostly from outside, from its opponents, whether they represent critical geopolitics, political geography, or mainstream political science.

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Information Processing

Accounts, Debits, and Credits

The previous chapter showed how transactions caused financial statement amounts to change. “Before” and “after” examples, etc. was used to develop the illustrations. Imagine if a real business tried to keep up with its affairs this way! Perhaps a giant chalk board could be set up in the accounting department.

As transactions occurred, they would be called in to the department and the chalk board would be updated. Chaos would quickly rule. Even if the business could manage to figure out what its financial statements were supposed to contain, it probably could not systematically describe the transactions that produced those results. Obviously, a system is needed.

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Introduction to Marketing Mix

In this lesson, we will introduce you to the activities that comprise a firm’s marketing program. These activities are popularly referred to as the 4 Ps – product, price, place and promotion. After you work out this lesson, you should be able to:

  • Understand the major product decisions in marketing planning
  • Know the pricing objectives and the factors that influence the pricing decisions
  • Appreciate the role of marketing channels and understand the important channel decisions to be taken
  • Comprehend the Promotion Mix of marketing and the different elements in the promotion mix
  • Learn how the 4 Ps combine to create effective marketing programs
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Market Segmentation, Targeting and Positioning

In this lesson, we will introduce you to the activities, viz., segmentation, targeting and positioning, that are collectively referred to as marketing strategy. After you work out this lesson, you should be able to:

  • Segment the markets based on several segmentation variables
  • Target a segment by identifying the fit between segment profitability and organizational capability
  • Position your product/service so that it occupies a distinct and valued place in the target customers’ minds
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Buyer behaviour

In this lesson, we will introduce you to the process through which the ultimate buyer makes purchase decisions. After you work out this lesson, you should be able to:

  • Identify what stimulates a consumer to consider buying
  • Describe the buyer’s decision making process and the several factors which influence this decision
  • Understand the response of the buyer to the marketing and other stimuli
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Internal Marketing versus External Marketing

Abstract: International marketing orientation requires modern concepts of economic activities in accordance with the requirements and specific foreign markets (national, multinational, global) in order to meet their current and future needs with maximum efficiency. The need for knowledge of international marketing occurs when we have to realize, to sell and promote goods and services to consumers and users in other countries.

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Marketing Environment

In this lesson, we will introduce you to the forces that define marketing’s external environment. After you work out this lesson, you should be able to:

  • Identify, analyze and monitor external forces and assess their potential impacts on the firm’s goods and services
  • Understand how marketers formulate their strategy within the frame of reference provided by the forces in the external environment

In this lesson, we will discuss the following:

Marketing Process

Objectives of Marketing Process

In this lesson, we will introduce you to the activities that makeup the marketing process. After you work out this lesson, you should be able to:

  • Identify the parts of the marketing process
  • Understand the relationships among the parts of the marketing process
  • Explain how the marketing process creates, captures and sustains value for the customer
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Marketing Concepts

Objectives of marketing concepts

In this lesson, we will introduce you to the conceptual ideas that makeup the marketing function of a business. After you work out this lesson, you should be able to:

  • List out the concepts of marketing
  • Understand how these concepts are interconnected
  • Explain how marketing is changing in a connected world
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Introduction to Marketing

In this lesson, we will introduce you to the business function of marketing. After you work out this lesson, you should be able to:

  • Define marketing and the utility (value) it creates for the customer
  • Trace the origin of marketing and explain how it has evolved
  • Describe the elements of a marketing strategy
  • Understand the scope of marketing
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Definition and trends within Purchasing Management

The aim of this chapter is to provide the reader with an introduction to Purchasing Management in order to fully appreciate the book. The chapter presents the book's definition of Purchasing Management as well as briefly presenting the potential benefits with working at a strategic level with purchasing activities for a corporation.

Furthermore trends and historical developments within the area of Purchasing Management will be presented.

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Purchasing Organization

The structure of the purchasing department is especially important in external and internal networks. The organizational model must facilitate activities in different strategic levels as well as cope with changes in external environment. By adjusting formalization and centralization levels, the organization can be positioned to best support the organization.

However, no universal solution exists, as the right structure is highly company specific and dynamic over time. Therefore, this is one of the major challenges that Purchasing Management confronts within business networks.

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Purchasing management and internal collaboration

Strategic purchasing is most often associated with external relations. However, purchasing integration and internal collaboration are the enablers of every corporate strategy. The aim of this chapter is to explain the connections between purchasing and the company's competitive priorities as well as emphasize the need for interdepartmental collaboration.

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Sourcing Strategies of Purchasing Management

Sourcing Strategies of Purchasing Management

Sourcing is the activity of securing external components or services needed within the own internal organization. Companies employ different kinds of sourcing strategies and no one is declared to be the optimum solution. Outsourcing which is the foundation to choice of sourcing strategies also intends to align with a company's core competence focus.

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International Financial Reporting Standards

A reporting entity (which we will call “entity” from here onwards) is either a company or a group of companies, which are all controlled by the same decision maker, i.e. normally the same board of directors. This occurs when the board of directors of a company controls directly or indirectly a number of other companies, by holding directly or indirectly the absolute or relative majority of the voting rights of other companies.

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Accounts, Debits, and Credits

The previous chapter showed how transactions caused financial statement amounts to change. “Before” and “after” examples, etc. was used to develop the illustrations. Imagine if a real business tried to keep up with its affairs this way! Perhaps a giant chalk board could be set up in the accounting department.

As transactions occurred, they would be called in to the department and the chalk board would be updated. Chaos would quickly rule. Even if the business could manage to figure out what its financial statements were supposed to contain, it probably could not systematically describe the transactions that produced those results. Obviously, a system is needed.

It is imperative that a business develop a reliable accounting system to capture and summarize its voluminous transaction data. The system must be sufficient to fuel the preparation of the financial statements, and be capable of maintaining retrievable documentation for each and every transaction

In other words, some transaction logging process must be in place. In general terms, an accounting system is a system where transactions and events are reliably processed and summarized into useful financial statements and reports. Whether this system is manual or automated, the heart of the system will contain the basic processing tools: accounts, debits and credits, journals, and the general ledger. This chapter will provide insight into these tools and the general structure of a typical accounting system.

Accounts

The records that are kept for the individual asset, liability, equity, revenue, expense, and dividend components are known as accounts. In other words, a business would maintain an account for cash, another account for inventory, and so forth for every other financial statement element. All accounts, collectively, are said to comprise a firm’s general ledger. In a manual processing system, you could imagine the general ledger as nothing more than a notebook, with a separate page for every account.

Thus, you could thumb through the notebook to see the “ins” and “outs” of every account, as well as existing balances. An account could be as simple as the following:

This account reveals that cash has a balance of $63,000 as of January 12. By examining the account, you can see the various transactions that caused increases and decreases to the $50,000 beginning of month cash balance. In many respects, this Cash account resembles the “register” you might keep for a wallet style check book. If you were to prepare a balance sheet on January 12, you would include cash for the indicated amount (and, so forth for each of the other accounts comprising the entire financial statements).

Debits and Credits

Without a doubt, you have heard or seen a reference to debits and credits; perhaps you have had someone “credit” your account or maybe you have used a “debit” card to buy something. Debits (abbreviated “dr”) and credits (abbreviated “cr”) are unique accounting tools to describe the change in a particular account that is necessitated by a transaction. In other words, instead of saying that cash is “increased” or “decreased,” we say that cash is “debited” or “credited.”

This method is again traced to Pacioli, the Franciscan monk who is given credit for the development of our enduring accounting model. Why add this complexity -- why not just use plus and minus like in the previous chapter? You will soon discover that there is an ingenious answer to this question!

Understanding the answer to this question begins by taking note of two very important observations:

  • every transaction can be described in debit/credit form and
  • for every transaction, debits = credits

The Fallacy of ”+/-“ Nomenclature

The second observation above would not be true for an increase/decrease system. For example, if services are provided to customers for cash, both cash and revenues would increase (a “+/+” outcome). On the other hand, paying an account payable causes a decrease in cash and a decrease in accounts payable (a “-/-” outcome). Finally, some transactions are a mixture of increase/decrease effects; using cash to buy land causes cash to decrease and land to increase (a “-/+” outcome). In the previous chapter, the “+/-” nomenclature was used for the various illustrations.

As you can tell by reviewing the illustration in Part 1, the “+/-” system lacks internal consistency. Therefore, it is easy to get something wrong and be completely unaware that something has gone amiss. On the other hand, the debit/credit system has internal consistency. If one attempts to describe the effects of a transaction in debit/credit form, it will be readily apparent that something is wrong when debits do not equal credits. Even modern computerized systems will challenge or preclude any attempt to enter an “unbalanced” transaction that does not satisfy the condition of debits = credits.

The Debit/Credit Rules

At first, it is natural for the debit/credit rules to seem confusing. However, the debit/credit rules are inherently logical (the logic is discussed at linked material in the online version of the text). But, memorization usually precedes comprehension. So, you are well advised to memorize the “debit/ credit” rules now. If you will thoroughly memorize these rules first, your life will be much easier as you press forward with your studies of accounting.

Assets/Expanses Dividends

As shown at right, these three types of accounts follow the same set of debit/credit rules. Debits increase these accounts and credits decrease these accounts. These accounts normally carry a debit balance. To aid your recall, you might rely on this slightly off–color mnemonic: D-E-A-D = debits increase expenses, assets, and dividends.

Liabilities/Revenues/Equity

These three types of accounts follow rules that are the opposite of those just described. Credits increase liabilities, revenues, and equity, while debits result in decreases. These accounts normally carry a credit balance.

Analysis of Transactions and Events

You now know that transactions and events can be expressed in “debit/credit” terminology. In

essence, accountants have their own unique shorthand to portray the financial statement consequence for every recordable event. This means that as transactions occur, it is necessary to perform an analysis to determine (a) what accounts are impacted and (b) how they are impacted (increased or decreased). Then, debits and credits are applied to the accounts, utilizing the rules set forth in the preceding paragraphs.

Usually, a recordable transaction will be evidenced by some “source document” that supports the underlying transaction. A cash disbursement will be supported by the issuance of a check. A sale might be supported by an invoice issued to a customer. Receipts may be retained to show the reason for a particular expenditure. A time report may support payroll costs. A tax statement may document the amount paid for taxes. A cash register tape may show cash sales. A bank deposit slip may show

collections of customer receivables. Suffice it to say, there are many potential source documents, and this is just a small sample. Source documents usually serve as the trigger for initiating the recording of a transaction.

The source documents are analyzed to determine the nature of a transaction and what accounts are impacted. Source documents should be retained (perhaps in electronic form) as an important part of the records supporting the various debits and credits that are entered into the accounting records. A properly designed accounting system will have controls to make sure that all transactions are fully captured. It would not do for transactions to slip through the cracks and go unrecorded.

There are many such safeguards that can be put in place, including use of renumbered documents and regular reconciliations. For example, you likely maintain a checkbook where you record your cash disbursements. Hopefully, you keep up with all of the checks (by check number) and perform a monthly reconciliation to make sure that your checkbook accounting system has correctly reflected all of your disbursements. A business must engage in similar activities to make sure that all transactions and events are recorded correctly. Good controls are essential to business success.

Determining an Account’s Balance

The balance of a specific account can be determined by considering its beginning (of period) balance, and then netting or offsetting all of the additional debits and credits to that account during the period. Earlier, an illustration for a Cash account was presented. That illustration was developed before you were introduced to debits and credits. Now, you know that accounts are more likely maintained by using the debit/credit system.

So, the Cash account is repeated below, except that the increase/decrease columns have been replaced with the more traditional debit/credit column leadings. A typical Cash account would look similar to this illustration:

A Common Misunderstanding About Credits

Many people wrongly assume that credits always reduce an account balance. However, a quick review of the debit/credit rules reveals that this is not true. Where does this notion come from? Probably because of the common phrase “we will credit your account.” This wording is often used when you return goods purchased on credit; but, carefully consider that your account (with the store) is on the store’s books as an asset account (specifically, an account receivable from you). Thus, the store is reducing its accounts receivable asset account (with a credit) when it agrees to “credit your account.”

On the other hand, some may assume that a credit always increases an account. This incorrect notion may originate with common banking terminology. Assume that Matthew made a deposit to his account at Monalo Bank. Monalo’s balance sheet would include an obligation (“liability”) to Matthew or the amount of money on deposit. This liability would be credited each time Matthew adds to his account. Thus, Matthew is told that his account is being “credited” when he makes a deposit.

The Journal

Most everyone is intimidated by new concepts and terminology (like debits, credits, journals, etc.).

But, learning can be made quite simple by relating new concepts to preexisting notions that are already well understood. So, think: what do you know about a journal (not an accounting journal, just any journal)? It’s just a log book, right? A place where you can record a history of transactions and events - usually in date (chronological) order. But, you knew that.

Likewise, an accounting journal is just a log book that contains a chronological listing of a company’s transactions and events. However, rather than including a detailed narrative description of a company’s transactions and events, the journal lists the items by a “form of shorthand notation.” Specifically, the notation indicates the accounts involved, and whether each is debited or credited. Remember what was said at the beginning of the chapter: “The system must be sufficient to fuel the preparation of the financial statements, and be capable of maintaining retrievable documentation for each and every transaction. In other words, some transaction logging process must be in place.”

The journal satisfies the need for this logging process! The general journal is sometimes called the book of original entry. This means that source documents are reviewed and interpreted as to the accounts involved. Then, they are documented in the journal via their debit/credit format. As such the general journal becomes a log book of the recordable transactions and events. The journal is not sufficient, by itself, to prepare financial statements. That objective is fulfilled by subsequent steps. But, maintaining the journal is the point of beginning toward that end objective.

Illustrating the Accounting Journal

The following illustration draws upon the facts for the Xao Corporation. Specifically it shows the journalizing process for Xao’s transactions. You should review it carefully, specifically noting that it is in chronological order with each transaction of the business being reduced to the short-hand description of its debit/credit effects. You will also note that each transaction is followed by a brief narrative description; this is a good practice to provide further documentation. For each transaction, it is customary to list “debits” first (flush left), then the credits (indented right).

Finally, notice that a transaction may involve more than two accounts (as in the January 28 transaction below); the corresponding journal entry for these complex transactions is called a “compound” entry.

As you review the general journal for Xao, note that it is only two pages long. An actual journal for a business might consume hundreds and thousands of pages to document its many transactions. As a result, some businesses may maintain the journal in electronic form only.

Special Journals

First, the illustrated journal was referred to as a “general” journal. All transactions and events can be recorded in the general journal. However, a business may sometimes use “special journals.” Special journals are totally optional; they are typically employed when there are many redundant transactions.

Thus, a company could have special journals for each of the following: cash receipts, cash payments, sales, purchases, and/or payroll. These special journals do not replace the general journal. Instead,

Now that you have reviewed the journal entries for January, consider a few more points. they just strip out recurring type transactions and place them in their own separate journal. The transaction descriptions associated with each transaction found in the general journal are not normally needed in a special journal, given that each transaction is redundant in nature. Without special journals, you can well imagine how voluminous a general journal could become. But, for learning purposes, let’s just rely on the general journal to accomplish our goals.

Page Numbering

Second, notice that the illustrated journal consisted of two pages (labeled page 1 and page 2). Although the journal is chronological, it is helpful to have the page number indexing for transaction cross referencing and working backward from financial statement amounts to individual transactions.

But, What are the Account Balances?

The general journal is a great tool to capture transaction and event details, but it certainly does nothing to tell a company about the balance in each specific account. For instance, how much cash does Xao Corporation have at the end of January? One could go through the journal and net the debits and credits to Cash ($25,000 - $2,000 + $4,000 - $500 + $4,800 - $5,000 = $26,300). But, this is tedious and highly susceptible to error. It would become virtually impossible if the journal were hundreds of pages long. A better way is needed. This is where the general ledger comes into play.

The General Ledger

As you just saw, the general journal is, in essence, a notebook that contains page after page of detailed accounting transactions. In contrast, the general ledger is, in essence, another notebook that contains a page for each and every account in use by a company. The ledger account for Xao would include the Cash page as illustrated below:

Xao’s transactions utilized all of the following accounts :

  • Cash
  • Accounts Receivable
  • Land
  • Accounts Payable
  • Notes Payable
  • Capital Stock
  • Service Revenue
  • Advertising Expense
  • Utilities Expense

Therefore, Xao Corporation’s general ledger will include a separate page for each of these nine

accounts.

Posting

Before diving into the details of each account, let’s consider what we are about to do. We are going to determine the balance of each specific account by posting. To do this, we will copy (“post”) the entries listed in the journal into their respective ledger accounts.

In other words, the debits and credits in the journal will be accumulated (“transferred”/ “sorted”) into the appropriate debit and credit columns of each ledger page. Following is an illustration of the posting process. Notice that arrows are drawn to show how the first journal entry is posted. A similar process would occur for each of the other accounts.

In reviewing the ledger accounts at right, notice that the “description” column includes a cross-reference back to the journal page in which the transaction was initially recorded. This reduces the amount of detailed information that must be recorded in the ledger, and provides an audit trail back to the original transaction in the journal.

To Review

Thus far you should have grasped the following accounting “steps”:

  • STEP 1: Each transaction is analyzed to determine the accounts involved
  • STEP 2: A journal entry is entered into the general journal for each transaction
  • STEP 3: Periodically, the journal entries are posted to the appropriate general ledger page

The Trial Balance

After all transactions have been posted from the journal to the ledger, it is a good practice to prepare a trial balance. A trial balance is simply a listing of the ledger accounts along with their respective debit or credit balances. The trial balance is not a formal financial statement, but rather a self-check to determine that debits equal credits. Following is the trial balance prepared from the general ledger of Xao Corporation.

Debits Equal Credits

Since each transaction was journalized in a way that insured that debits equaled credits, one would expect that this equality would be maintained throughout the ledger and trial balance. If the trial balance fails to balance, an error has occurred and must be located. It is much better to be careful as you go, rather than having to go back and locate an error after the fact. You should also be aware that a “balanced” trial balance is no guarantee of correctness. For example, failing to record a transaction, recording the same transaction twice, or posting an amount to the wrong account would produce a balanced (but incorrect) trial balance.

Financial Statements From the Trial Balance

In the next chapter you will learn about additional adjustments that may be needed to prepare a truly correct and up-to-date set of financial statements. But, for now, you can probably see that a tentative set of financial statements could be prepared based on the trial balance. The basic process is to transfer amounts from the general ledger to the trial balance, then into the financial statements:

In reviewing the following financial statements for Xao, notice that blue italics were used to draw attention to the items taken directly from the trial balance above. The other line items and amounts simply relate to totals and derived amounts within the statements. These statements would appear as follows:

Computerized Processing Systems

You probably noticed that much of the material in this chapter involves rather mundane processing.

Once the initial journal entry is prepared, the data are merely being manipulated to produce the ledger, trial balance, and financial statements. No wonder, then, that some of the first business applications that were computerized many years ago related to transaction processing. In short, the only “analytics” relate to the initial transaction recordation. All of the subsequent steps are merely mechanical, and are aptly suited to computerization. Many companies produce accounting software.

These packages range from the simple to the complex. Some basic products for a small business may be purchased for under $100. In large organizations, millions may be spent hiring consultants to install large enterprise-wide packages. Recently, some software companies have even offered accounting systems maintained on their own network, with the customers utilizing the internet to enter data and produce their reports.

What do they Look Like

As you might expect, the look, feel, and function of software-based packages varies significantly. Each company’s product must be studied to understand its unique attributes. But, in general, accounting software packages:

  • Attempt to simplify and automate data entry (e.g., a point-of-sale terminal may actually become a data entry device so that sales are automatically “booked” into the accounting system as they occur).
  • Frequently divide the accounting process into modules related to functional areas such as sales/collection, purchasing/payment, and others.
  • Attempt to be “user-friendly” by providing data entry blanks that are easily understood in relation to the underlying transactions.
  • Attempt to minimize key-strokes by using “pick lists,” automatic call-up functions, and auto complete type technology.
  • Are built on data-base logic, allowing transaction data to be sorted and processed based on any query structure (e.g., produce an income statement for July, provide a listing of sales to Customer Smith, etc.)
  • Provide up-to-date data that may be accessed by key business decision makers.
  • Are capable of producing numerous specialized reports in addition to the key financial statements.

Following is a very typical data entry screen. It should look quite familiar. After the data are input, The subsequent processing (posting, etc.) is totally automated. Despite each product’s own look and feel, the persons primarily responsible for the maintenance and operation of the accounting function must still understand accounting basics such as those introduced in this chapter: accounts, debits and credits, journal entries, etc.

Without that intrinsic knowledge, the data input decisions will quickly go astray, and the output of the computerized accounting system will become hopelessly trashed. So, while it is safe to assume that you will probably be working in a computerized accounting environment, it equally true to say that you should first come to understand the basic processing described in this and subsequent chapters. These principles will clearly guide you toward successful implementation and use of most any computerized accounting product, and the reports they produce.

T-accounts

A useful tool for demonstrating certain transactions and events is the “t-account.” Importantly, one would not use t-accounts for actually maintaining the accounts of a business. Instead, they are just a quick and simple way to figure out how a small number of transactions and events will impact a company. T-accounts would quickly become unwieldy in an enlarged business setting. In essence, taccounts are just a “scratch pad” for account analysis. They are useful communication devices to discuss, illustrate, and think about the impact of transactions. The physical shape of a t-account is a “T,” and debits are on the left and credits on the right.

The “balance” is the amount by which debits exceed credits (or vice versa). Below is the t-account for Cash for the transactions and events of Xao Corporation. Carefully compare this t-account to the actual running balance ledger account which is also shown (notice that the debits in black total to $33,800, the credits in red total to $7,500, and the excess of debits over credits is $26,300 -- which is the resulting account balance shown in blue).

Comprehensive T-Accounting Illustration

The following diagram illustrating the f ow of transactions from a general journal to a set of t-accounts may look rather “busy” but it is actually quite simple. The debits/credits for each entry can be traced to the corresponding accounts. Once all of entries are transferred, the resulting balances for each account can be carried forward to form the trial balance.

Chart of Account

A listing of all accounts in use by a particular company is called the chart of accounts. Indivi dual accounts are often given a specific reference number. The numbering scheme helps keep up with the accounts in use, and helps in the classification of accounts. For example, all assets may begin with ‘‘1’’ (e.g., 101 for Cash, 102 for Accounts Receivable, etc.), liabilities with “2,” and so forth. A simple chart of accounts for Xao Corporation might appear as follows:

  • No. 101: Cash
  • No. 102: Accounts Receivable
  • No. 103: Land
  • No. 201: Accounts Payable
  • No. 202: Notes Payable
  • No. 301: Capital Stock
  • No. 401: Service Revenue
  • No. 501: Advertising Expense
  • No. 502: Utilities Expense

The assignment of a numerical account number to each account assists in data management, in much

Control and Subsidiary Accounts

Some general ledger accounts are made of many sub-components. For instance, a company may have total accounts receivable of $19,000, consisting of amounts due from Compton, Fisher, and Moore. The accounting system must be sufficient to reveal the total receivables, as well as amounts due from each customer. Therefore, sub-accounts are used. For instance, in addition to the regular general ledger account, separate auxiliary receivable accounts would be maintained for each customer, as shown in the following illustration:

The total receivables are the sum of all the individual receivable amounts. Thus, the Accounts Receivable general ledger account total is said to be the “control account” or control ledger, as it represents the total of all individual “subsidiary account” balances. The company’s chart of accounts will likely be based upon some convention such that each subsidiary account is a sequence number within the broader chart of accounts.

For instance, if Accounts Receivable bears the account number 102, you would expect to find that individual customers might be numbered as 102.001, 102.002, 102.003, etc. It is simply imperative that a company be able to reconcile subsidiary accounts to the broader control account that is found in the general ledger. Here, computers can be particularly helpful in maintaining the detailed and aggregated data in perfect harmony.

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