Accounting Concepts (CTBA020 - SIGACTB)

Equity, the object of Accounting, is a set of assets, rights and liabilities expressed in a determined currency and pertaining to a person and/or company.

Assets

Assets are items capable of satisfying human needs and subject to economic assessment. They can be classified as:

Material (Tangible) - meant for use (computers, tables, etc.), exchange (goods, money, etc) and consumption (cleaning material, etc.)
Immaterial (Intangible) - brands and patents, improvements, etc.

Rights

All values the company has to receive from third parties (Trade Notes Receivable, Rent, etc.)

Obligations

All values the company has to pay to third parties (Trade Notes Payable, Salaries, Taxes, etc.)

Balance Sheet

This reflects the company's financial position. Law nr. 6,404/76, in article 178, establishes that, in Balance Sheet, accounts shall be classified into the following groups:

Assets (Goods and Rights)

Short term Assets
Long-term Realizable Assets
Permanent Assets, divided into Investments, Fixed Assets and Deferred Assets.

Liabilities (Obligations)

Current Liabilities
Long-term Liabilities

Current Liabilities

Long-term Liabilities

Deferred Income

Net Equity

Share Capital
Capital Reserves
Revaluation Reserves
Accrued Profit or Loss Reserves.

Incomes

Deferred Income

Accounting Equation

ASSETS = LIABILITIES + NET EQUITY

Account Balance

It is the difference between total of debit values and total of credit values posted in the account.

This balance is debit when total of debit values is greater than total of credit values posted in the same account. On the other hand, balance is credit when total of credit values posted is greater than debit values posted in the same account.

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Accounting Concepts (CTBA020 - SIGACTB)