General characteristic of bookkeeping account and accounting in

General characteristic of book-keeping account and accounting in pharmacies and pharmaceutical firms. Characteristic of bookkeeping account methods. Structure and correspondence of book-keeping accounts.

Book-keeping account is a process of exposure, measuring, registration, accumulation, generalization, storage and information transfer about activity of enterprise to the internal and external users for the decision-making.

The internal users of accounting information are: • owners of enterprise; • administrative staff; • workers of enterprises. The external users of accounting information are: • business market partners; • organs of government and international control; • public organizations.

• • The whole complex of methods with the help of which economic activity of enterprise is represented in the account is the method of book-keeping. It consists of certain elements, the basic of which are: document; inventory making; accounts; double record; estimation; balance generalization; accounting.

Basic principles of book-keeping are the following: • autonomy of enterprise is consideration of every enterprise as juridical person which is disjoined from owners. Therefore private property and obligations of owners mustn’t be represented in the financial accounts of enterprise; • continuity of activity is estimation of assets and obligations of enterprise on the basis of supposition, that will last this activity farther;

• periodicity is distributing the enterprise activity on certain periods for composition the financial accounting; • accordance of profits and expenses – for financial result of current period determination it is necessary to compare the profits of current period with expenses which were carried out for the receiving these profits. Profits and expenses are represented in an account in the moment of their origin independently from the time of receiving and paying the money;

• sequence - foresees permanent (from year to year) construction by the enterprise the chosen registration policy. The change of registration policy must be grounded and exposed in the financial accounting; • circumspection is method of estimation which is used in a book-keeping, must prevent understating of estimation the obligations, expenses and estimation overstating of enterprise assets and profits.

Stages of book-keeping in pharmaceutical establishments. A registration process in pharmacies passes a few stages. • On the first stage the exposure, measuring and registration of economic operations are conducted. The foundation for book-keeping are the primary documents which fix the facts of carrying out the economic operations. The primary documents must be drawn up during implementation the economic operation, and if it is impossible - directly after it’s finishing. The performers are the pharmacist, druggist, accountant.

• On the second stage accumulation, generalization and storage of accounting information which is contained in primary documents is carried out. The performers are a pharmacist, accountant. • On the third stage the information transfer is carried out by drawing up the set forms of accounts on the basis of information of bookkeeping account: • a) pharmacies are under an obligation to give a monthly, quarterly and annual financial reporting to labour collectives on their requirement, owners (founders); • b) the financial reporting of pharmacies does not represent a commercial secret, except the cases foreseen by the legislation.

• The financial reporting of pharmacies (except budgetary establishments, representative offices of foreign subjects of economic activity and small business entities) includes: balance, report about financial results, report about the financial money resources movement, report about an own capital and notes added to the reports. The performers are accountant, director of pharmacy. • Fourth stage is the use of accounting and current information in the economic analysis of pharmacy. The performers are accountant, director.

Structure of balance and its component parts. • Book-keeping balance is the method of the economic grouping of enterprise means by composition, use and forming sources on the certain date in the generalized cost measuring index. By the form book-keeping balance is table which consists of two parts.

Structure of balance Assets Liabilities I. Irreversible (noncirculating) assets Accounts 10 -19 I. Own capital Accounts 40 -46 II. Circulating assets Accounts 20 -38 II. Providing further expenses and payments Accounts 47 -49 III. Expenses of future periods Account 39 III. Long-term obligations Account 55 IV. Current obligations Accounts 60 -68 V. Profits of future periods Account 69

First or left part is named "assets", in it information is represented about presence and state of economic means of enterprise by their composition and setting. Second or right part of book-keeping balance is named “liabilities”, in it information is represented about kinds and sizes of sources of forming the economic means.

Registration formula of book-keeping balance is the following: Assets = Obligation + Own capital (Liabilities) Registration formula of report about financial results is the following: Profit = Income - Expenses

• An assets are the resources, controlled by an enterprise as a result of past events, the use of which, as possible to expect, will result to the receiving of economic benefits in the future. • The obligation is the debt of enterprise, which arose up because of past events redemption of which, as possible to expect, will bring to decrease enterprise resources, which present economic benefits.

• Own capital is a part in the assets of enterprise, which stays after deduction of its obligations. • The profit is a sum on which income exceeds the expenses related to them. • Under “income" understand the volume of goods sale. • Expenses are decreasing the economic benefits as a form of assets, decreasing or increasing the obligations which result to diminution of the own capital.

Classification of economic means and sources of their formation 1. Economic means (assets): • basic assets (irreversible) : buildings, equipment, inventory, transport, non-material assets; • circulating capital : goods, container, money, not valuable objects, debtor debts; 2. Sources of economic means formation: • own capital (statute, reserve, income, additional, budgetary financing); • lent capital (credits of banks, creditors, obligations).

Structure of book-keeping accounts and order of reflection the economic operations. During economic activity plenty of operations (money receiving, goods movement, etc. ) which must be represented are carried out in establishments. But daily account of economic means changes (basic, circulating), sources of their formation (statute fund, credits of bank, incomes) can not be performed with the help of balance, because balance is made one time in a month, quarter, year and shows the state of enterprise on the certain date.

• The daily account of economic operations can be carried out only by the accounts which are a double-sided table, left side is named a debit (Dt), right side is a credit (Ct) • Three types of accounts are distinguished: active, passive and actively-passive (depending on that, in what part of balance account balance is represented).

The active accounts represent property of enterprise by its composition and placing, initial and eventual balance (remain) are written down in a debit on them (accounts of means: basic means, supplies, goods; money means: cash-desk, bank account; account of expenses).

• The passive accounts represent sources of property formation, the initial and eventual balance (remain) are written down in a credit on them (the accounts of own capital, statute, reserve, credits of bank, incomes accounting, profits). • The actively-passive accounts are the accounts of calculations, an initial and eventual remain on them can be both in a debit and in a credit; debit balance is written down in the asset of balance, credit - in liabilities of balance (account of calculations with debtors, creditors: suppliers, budget).

The accounts are an auxiliary link between the facts of performed operations and bookkeeping balance according to Plan of accounts For the calculation of eventual balance (Ba 2) the following formula is used: • for the active accounts: Ba 2= Ba 1 + Debit of turns - Credit of turns; • for the passive accounts: Ba 2 = Ba 1 + Credit of turns - Debit of turns.

Every economic operation performed in a pharmacy is written down twice – in the debit of one and credit of another account. This is the method of double record. The mechanism of action of double record consists in the synchronous representation of every economic operation in the debit of one account and in the credit of another account in equal sums. Name of such intercommunication of two accounts, which represents performed economic operations, is correspondence of accounts.

Accounts Plan of book-keeping account. • Accounts Plan is the list of accounts, which represents the grouping of necessary information about economic activity of enterprise and determines such organization of book-keeping, which enables to obtain information for the management, daily control in owner’s interests. • Accounts for the accounting of operating, financial and investment activity of enterprises are represented in Accounts Plan, which has the following basic descriptions:

Description of Accounts Plan Indexes Operating Plan of accounts Grouping of accounts 3 sections, 10 classes, 0 - class contains the off-balance accounts Numeration of synthetic accounts Balance and off-balance accounts -2 numbers Numeration of subaccounts Ratified codes from three numbers Analytical accounts Opened by an enterprise independently; numbers must begin from the number of the proper account (sub-account)

• The accounts which the homogeneous types of assets or obligations taken into account are associated in the proper classes. There are 10 such classes, each of them has the code: from 0 to 9. Codes (numbers) and names of synthetic accounts (accounts of the first order) and sub-accounts (accounts of the second order) in Accounts Plan of bookkeeping account are indicated by the decimal numeration. • By the first number of code the class of accounts is determined by the second number of synthetic account, third is the number of sub-account.

Forms of book-keeping 1. Magazine-warrant system of book-keeping 2. Computer form of book-keeping

Magazine-warrant system is built according to basic principles, namely: • combination in one register of chronologic and synthetic supplies; • a construction of magazines-warrants according to a credit sign; • possibility of combination of synthetic and analytical account; • use of chess information and linear position method; • application of auxiliary books, information and story magazines; • combination in one magazine-warrant of a few interconnection synthetic accounts; • pointing correspondent accounts in the journalwarrants.

Computer form of book-keeping accounting • • • On the basis of information which are entered in a computer automatically conducted the following : setting information on the proper accounts; forming in-clearing and credit turns and determination of balance on accounts; forming circulating information; forming current document; printing initial information on the paper transmitters.

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