Post by rabia373 on Mar 10, 2024 7:34:20 GMT
In the previous chapter of Accounting for Raptors , we were talking about the Balance Sheet of a company. In it we saw what the financial situation of the business was like at a given time: its assets, rights and obligations. Today I am going to explain another fundamental tool in basic accounting, which is the Profit and Loss account. Which complements the Balance Sheet with its information. The Profit and Loss account is not a fixed detail of the company's data, but rather it shows us trends or evolutions of the business. In it we will not find goods, rights or obligations, it is simpler and more spartan when it comes to giving us information, but also more precise. It only records the Income and Expenses that exist, it does not matter to us if these have already been collected or paid or not. Remember : Income : operation that increases the value of the business. Expense : operation that reduces the value of the business. If income is greater than expenses we will have profits . If expenses are greater than income, we will have losses . Remember that in this account we do not measure whether we have collected or paid, we complete this by jointly reviewing this Profit and Loss Account with the Balance Sheet. We can have a profit of €, but not have collected it yet and not have that money in the bank.
Or we can have losses of €, and not have paid them yet and still have that money in our bank account. The interesting thing about the Profit and Loss account is learning how we have come to make profits or losses. It is a very good account to detect what mistakes we have made during an exercise and how to improve our management. To do this, I prop Whatsapp Number List ose a tour, with the help of Ecoaerem , an e-commerce that sells ecological cleaning products for companies in which I participate as a partner. With this example we are going to know and distinguish: The types of income of a business Types of business expenses The results that a business can have Let us begin… the types of income that exist in a business the types of income that exist in a business The types of income that exist in a business When Ecoaerem started, my partners and I set out to sell everything salable in order to grow the business as quickly as possible. We thought that our only source of business would be the sale of products that we had displayed on our website. But we were surprised to see that there were more lines of income than we thought.
We identify three different types of income: Sales income: these are what we achieve thanks to the business activity itself. In my case it was selling cleaning products through ecommerce. They are also called “operating income”. A business should not stick to having only one source of operating income. In our case, we also provided cleaning services to companies that required it. We not only sold a product, we also provided an associated service. Extraordinary income: these are those that have nothing to do directly with the business activity , they are also called “atypical income”. They occur sporadically. In our case, for example, it came with the sale of a van that we contributed at the beginning of the business and that we later did not use. By selling it we obtained “atypical income.” Financial Income: arises because capital is transferred to third parties. They may be: Interest charged for putting money in the bank or an investment fund. Dividends for holding shares of other companies. Profits made by selling shares of other companies that are in our possession. In our case, for example, Ecoaerem lent money to another company in the group and received income from it, in the form of interest. The types of expenses that exist in a business As for the expenses associated with the business , there are a few more.
Or we can have losses of €, and not have paid them yet and still have that money in our bank account. The interesting thing about the Profit and Loss account is learning how we have come to make profits or losses. It is a very good account to detect what mistakes we have made during an exercise and how to improve our management. To do this, I prop Whatsapp Number List ose a tour, with the help of Ecoaerem , an e-commerce that sells ecological cleaning products for companies in which I participate as a partner. With this example we are going to know and distinguish: The types of income of a business Types of business expenses The results that a business can have Let us begin… the types of income that exist in a business the types of income that exist in a business The types of income that exist in a business When Ecoaerem started, my partners and I set out to sell everything salable in order to grow the business as quickly as possible. We thought that our only source of business would be the sale of products that we had displayed on our website. But we were surprised to see that there were more lines of income than we thought.
We identify three different types of income: Sales income: these are what we achieve thanks to the business activity itself. In my case it was selling cleaning products through ecommerce. They are also called “operating income”. A business should not stick to having only one source of operating income. In our case, we also provided cleaning services to companies that required it. We not only sold a product, we also provided an associated service. Extraordinary income: these are those that have nothing to do directly with the business activity , they are also called “atypical income”. They occur sporadically. In our case, for example, it came with the sale of a van that we contributed at the beginning of the business and that we later did not use. By selling it we obtained “atypical income.” Financial Income: arises because capital is transferred to third parties. They may be: Interest charged for putting money in the bank or an investment fund. Dividends for holding shares of other companies. Profits made by selling shares of other companies that are in our possession. In our case, for example, Ecoaerem lent money to another company in the group and received income from it, in the form of interest. The types of expenses that exist in a business As for the expenses associated with the business , there are a few more.