Main accounts in the facility

 

The main accounts in any establishment consist of five accounts, and these accounts are divided into two parts

Real (ongoing) accounts

 That is, continuous for more than an accounting period, which are the elements of the balance sheet, which are (assets, liabilities, and equity)

Nominal accounts (temporary)

They are temporary accounts that are opened for one accounting period and are closed at the end of the year in the income statement, that is, their balance is zero after making the closing entry, and they are the items of the income statement (income and expenses).

These master accounts have their own sub-accounts

First - the assets

The assets are divided into:

Non-current assets which are:

Assets that are difficult to convert into cash and are continuous for more than a year or an accounting period. They are also called tangible or fixed assets, which are (lands - cars - machinery and equipment - buildings - furniture - printers and computers - long-term investments)

Current assets:

Assets that are easy to convert into cash and have a period of one year or less, i.e. they are used during one operating cycle or one accounting period, which are (cash - cash in the bank - clients or debtors - receipts - cash provided - receivable income - and short-term investments)

Noticeable

Clients are related to the main activity of the establishment, while debtors are related to selling fixed assets.

Other or intangible assets

It is fame, patentability, trademarks, and intangible because it is an intangible, non-material thing

Second, liabilities

Non-current liabilities

They are long-term liabilities, which extend for more than a year or an accounting period, and it is a commitment on the business or economic unit for the survival of others. It is also called long-term liabilities or liabilities, which are (long-term loans _ bonds _ debts to purchase fixed assets)

Non-current liabilities:

They are short-term liabilities, liabilities, or liabilities, meaning that they are for one accounting period or a year or less, and they are (short-term loans - suppliers or creditors - due expense and advance payment)

Noticeable

Suppliers are linked to the main activity of the establishment, that is, to purchase on credit, that is, to the credit account linked to the purchase of fixed assets.

Working Capital = Current Assets _ Current Liabilities

Third, the elements of property rights

The capital is the amount paid by the owner of the facility, owners or partners to practice the activity of the facility. Usually they deposit it in the facility’s account in the bank or in its safe.

Withdrawals

It is what the owner of the facility makes withdrawals, whether cash withdrawals or in-kind withdrawals, such as withdrawing furniture from the facility or its goods and others, and withdrawals reduce the capital, and in some cases, the capital may not decrease as it is placed on his current account at the facility and is deducted from his current account later.

An established current account or a current partner account

It is an account that is made in proving what the owner of the facility or the partner has and what they owe, what is withdrawn and what he has deposited in the establishment, and this account is opened because the facility has a legal personality independent of the personality of its owners.

Retained, retained, or retained earnings

Partners may agree to withhold part of the profits, as it is included in the business of the facility to increase investment or to pay off the debts accumulated on the facility, which are profits from previous years and do not appear in the next year’s budget unless they are transferred and distributed to the partners, and it is an obligation for the establishment to save the owners.