Accounting elements
Accounting elements are the basic classification of accounting objects, and they are the concretization of accounting objects.
Enterprise accounting elements are divided into six categories, namely assets, liabilities, owner's equity, income, expenses and profits. Among them, the three accounting elements of assets, liabilities and owner's equity mainly reflect the financial status of the enterprise; the three accounting elements of income, expense and profit mainly reflect the operating results of the enterprise.
Dynamic elements:
Income, expenses, profit
Static elements:
Assets, liabilities, owner's equity
The accounting elements of public institutions are divided into five categories, namely, assets, liabilities, net assets, income and expenditure.
Measurement attributes: historical cost, replacement cost, net realizable value, present value, fair value.
Accounting elements that reflect the financial status of an enterprise
1. Assets
Assets refer to resources formed by past transactions or events of an enterprise, owned or controlled by the enterprise, and expected to bring economic benefits to the enterprise. The main characteristics of the asset are:
(1) Assets are formed by past transactions or events of the enterprise. The past transactions or events of an enterprise include purchase, production, manufacturing, or other transactions or events. Transactions or events that are expected to occur in the future do not form assets.
(2) Assets are resources owned or controlled by enterprises. Owned or controlled by an enterprise means that the enterprise has the ownership of a certain resource, or although it does not enjoy the ownership of a certain resource, the resource can be controlled by the enterprise.
(3) Assets are expected to bring economic benefits to the enterprise. Expected to bring economic benefits to the enterprise refers to the potential for direct or indirect logistics of cash and cash equivalents into the enterprise.
Assets are classified according to liquidity and can be divided into current assets and non-current assets.
Current assets refer to assets that are expected to be realized, sold or consumed in a normal business cycle, or are held mainly for trading purposes, or are expected to be realized within one year (including one year) from the balance sheet date and from the balance sheet Cash or cash equivalents with unrestricted ability to exchange other assets or pay off liabilities within one year from the date. Current assets mainly include monetary funds, transactional financial assets, notes receivable, accounts receivable, prepayments, interest receivable, dividends receivable, other receivables, inventory, etc.
Non-current assets refer to assets other than current assets, which mainly include long-term equity investments, fixed assets, construction in progress, construction materials, intangible assets, development expenditures, etc.
2. Liabilities
Liabilities refer to the current obligations of an enterprise formed by past transactions or events that are expected to cause economic benefits to flow out of the enterprise. The main characteristics of liabilities are:
(1) Liabilities are current obligations formed by past transactions or events of an enterprise. Current obligations refer to the obligations that an enterprise has assumed under current conditions. Obligations arising from future transactions or events are not current obligations and should not be recognized as liabilities.
(2) The settlement of liabilities is expected to cause economic benefits to flow out of the enterprise.
Liabilities are classified according to liquidity and can be divided into current liabilities and non-current liabilities.
Current liabilities are expected to be settled in a normal business cycle, or held mainly for trading purposes, or due to be settled within one year (including one year) from the balance sheet date, or the enterprise has no right to pay off independently Liabilities deferred to more than one year after the balance sheet date. Current liabilities mainly include short-term loans, notes payable, accounts payable, advance receipts, employee compensation payable, taxes payable, interest payable, dividends payable, other payables, etc.
Non-current liabilities refer to liabilities other than current liabilities, mainly including long-term loans, bonds payable, etc.
3. Equity
Owner's equity refers to the residual equity enjoyed by the owner after deducting liabilities from the assets of the enterprise. The owner's equity of a company is also called shareholders' equity.
Owners’ equity includes paid-in capital (or equity), capital reserves, surplus reserves and undistributed profits. Among them, the capital reserve includes the portion of the company's received investment from investors that exceeds its share in the registered capital or share capital, and the gains and losses directly included in the owner's equity. Surplus reserves and undistributed profits are collectively called retained earnings.
Accounting elements that reflect business results
1. Revenue (Revenue)
Income refers to the total inflow of economic benefits that are formed in the daily activities of the enterprise and that will increase the owner's equity and have nothing to do with the capital invested by the owner.
2. Expense
Expenses refer to the total outflow of economic benefits that are incurred by the enterprise in its daily activities that will reduce the owner's equity and have nothing to do with the distribution of profits to the owner.
3. Profit
Profit refers to the operating results of an enterprise in a certain accounting period. Profit includes the net amount of income minus expenses, and the gains and losses that are directly included in the current profit.
The gain or loss (Loss) that is directly included in the current profit refers to the gain or loss that should be included in the current profit and loss, will cause the increase or decrease of the owner’s equity, and has nothing to do with the owner’s capital investment or the distribution of profits to the owner. loss.
In terms of accounting principles or basic work norms, all types of units are basically the same, but the business activities of administrative units and public institutions adopt a payment realization system instead of an accrual system, which leads to the establishment and establishment of accounting elements of administrative institutions. Its definition is different from that of enterprise units. Administrative institutions have set up five accounting elements for the balance sheet and income and expenditure statement (similar to the income statement of an enterprise), including assets, liabilities, net assets, income and expenditure. In the definition of accounting elements, taking the definition of accounting elements of public institutions as an example, assets refer to economic resources that can be measured in currency that are owned or used by public institutions, including various properties, creditor’s rights and other rights; liabilities refer to public institutions’ Debts assumed that can be measured in currency and need to be repaid by assets or labor services, including borrowed money, payables, and payables; net assets refer to the difference between the assets of the business unit minus the liabilities, including business funds and fixed funds , Special funds, business balances and operating balances, etc.; income refers to the non-repayable funds obtained by public institutions in order to carry out business activities, including subsidy income, business income, operating income and other income; expenditure refers to the business Various capital expenditures and losses incurred in activities and other activities, as well as expenditures for capital construction projects, including allocated funds, business expenditures, operating expenditures, etc.
At the same time, there are some differences between administrative institutions and enterprises in terms of specific accounting confirmation and measurement principles. For example, the fixed assets of administrative institutions are not depreciated.
