Business Structures, Assets, and Accounting Essentials

Posted on Mar 14, 2025 in Business Administration and Innovation Management

Organizations

There are all kinds of organizations. Organizations administer plans and require organization, coordination, and control. Organizations, when well-managed, are effective, doing the right things correctly.

Production Factors

Production factors are the elements of wealth used in the production of goods and services:

  • Nature: Natural resources
  • Goods and Services (BYS): Products and services offered
  • Labor: Human effort
  • Capital: Money to set up operations and purchase technology
  • Time: A critical resource
  • Information: Enables greater efficiency

Business Objectives

The goals of a company are to satisfy consumer needs, generate profit, and survive over time. Accounting Information Systems (AIS) are needed to determine if the company is generating profits.

The Company and its Surroundings

To generate business value, the external environment and internal value generation must be taken into account. Tasks, processes, and knowledge are utilized for the production of goods and services. Generating value and meeting consumer needs requires making decisions that improve processes and efficiency. Decision-making requires AIS (although incorrect decisions can be made).

Accounting

Accounting, as a discipline, is a field of study. Its aim is not only the mechanical registration of operations but also explaining how and why accounting is done. As an AIS, it is a means to obtain information and make sound decisions. The information generated by accounting can be used internally (by administrators) or externally (by government, banks, etc.). Therefore, it must be reliable.

Types of Companies and Assets

There are three main types of companies:

  1. Industrial: Convert raw materials and labor into products.
  2. Commercial: Buy and sell products.
  3. Service: Provide services.

Assets are the resources that comprise a company’s holdings, to be used, processed, consumed, or sold. They can be expressed as economic goods because some effort is required to obtain them. Assets include:

  • Property for Use: Buildings, machinery, etc.
  • Goods for Sale: Merchandise.
  • Available Funds: Money for purchasing assets or paying liabilities.
  • Intangibles: Brand value, knowledge.

Equity

Equity is the set of assets and obligations (liabilities). Assets are amended by contributions or withdrawals by partners and by gains or losses from operations. The basic accounting equation is:

Equity (PN) = Assets (A) – Liabilities (P)

Accounting Data Processing

  • Input: Operations
  • Processing: Technical accounting standards
  • Output: Accounting information (balance sheets, results, etc.)

Accounts

Accounts record all transactions. They can be:

  • Patrimonial: Do not affect equity (A, P, PN).
  • Result: Affect equity (income and expenses).

Equity Changes

Equity variations are represented as:

  • PN = A – P
  • A = P + PN
  • A = P + C + G – PS (where C = Capital, G = Gains, PS = Losses)
  • A + PS (Debit) = P + C + G (Credit)

Commercial Documents

Commercial documents constitute endorsements and written records of operations. They serve to:

  • Provide evidence.
  • Provide control.
  • Serve as proof in court.

Documentation must be kept for 10 years by law.

Systematization of Documents

Group 1: Purchase and Sale (Invoices)

An invoice is a document where the buyer tells the seller the amount due on the sale, the goods and services, and the conditions of payment (cash, installments, etc.).

  • Invoice A: Issued by a Registered Responsible party (RI) to another RI, with VAT discriminated.
  • Invoice B: Issued by an RI to an Exempt Responsible party (REX) or final consumers.
  • Invoice C: Issued by a Non-Registered Monotributista (NIR) to all.

Group 2: Transport-Related (Remittances)

A remittance is a document that accompanies merchandise during transport and delivery. It is issued in triplicate.

Group 3: Payment-Related Documents (Promissory Note, Check, Receipt)

  • Promissory Note: A promise of payment by the debtor (drawer) to the creditor (beneficiary).
  • Check: A document where the debtor gives an order of payment to a bank, with funds deposited in an account, to the creditor (drawer-payee-holder-paying bank).
  • Receipt: A document issued by the collector to the payer. The payer has proof of payment, and the collector has a detail of the collection. It is issued in duplicate; the original is for the payer, and the duplicate is for the collector.

Group 4: Various Documents (Credit and Debit Notes)

  • Credit Note: Informs the buyer of a decrease in the amount payable. Reasons include: billing for a greater amount, discounts, or discounted prices for returned goods.
  • Debit Note: Informs the buyer of an *increase* in the amount payable. Reasons include: billing for a smaller amount, fees charged, or interest payable outside of the term.