Definition, Nomenclature and Classification

In the previous chapters it has been said that to know the financial situation and the profit or loss liquidity of the company it is necessary to formulate the documents called Balance sheet and Statement of losses and Profits.
Now, in order to know the values ​​with which these states are formulated, it is necessary to keep 188 special registers for control in them the increases and decreases that originate the operations carried out in the different concepts of Assets, Liabilities and Capital.
Each of the above records is called an account. This can be defined as follows:
Account. It is the register where the variations produced by the operations carried out in the different concepts of Assets, Liabilities and Capital are controlled in an orderly manner.
Account name. The name assigned to the account must give a clear and precise idea of ​​the value or concept it controls; for example, the account that controls the cash is called the Cashier; The one that controls the documents in favor of the company is called Documents receivable, etc.; therefore, there will be as many accounts as there are values ​​or concepts of Assets, Liabilities and Capital.

Classification of accounts. The accounts are classified into three groups, which are:

• Asset Accounts Liability Accounts Capital Accounts
• Asset Accounts. Asset accounts are those that control the assets and rights owned by the company.
• Liability Accounts. Liability accounts are those that control the debts and obligations in charge of the entity.
• Capital Accounts. Capital accounts are those that control both the profits as well as the losses of the business.

Precisely, from the Assets, Liabilities and Capital accounts, the values ​​are obtained with which the Balance Sheet and the Statement of Profit and Loss are formulated.
To more easily and safely determine these values, it is necessary that the accounts contain two columns for register in them the increases and decreases suffered by the concepts of Assets, Liabilities and Capital due to operations made. Example:

BOX

SHOULD

TO HAVE

As can be seen, the account consists of two columns: the first is on the left page, and the second is on the right page. Columns can also be distributed on the same page, leaving the account as follows:

BOX	BANKS
SHOULD TO HAVE	SHOULD TO HAVE

 This second form, although it only uses one page for each account, also has two columns.

In addition to the previous models, there are others, which will be the subject of a later study. Below we give the accounting terms with which the columns are called and the amounts that are recorded in them:

• Should. It's the column on the left.
• To have. It's the column on the right side.
• Charge or debit. It is to enter an amount in the debit of an account.
• Pay or credit. It is to enter an amount in the credit of an account.