Macroeconomic agents
In macroeconomics, four economic agents are considered:
§ Households- are the owners of economic resources (factors of production), the main consumers of goods and services. As income, wages are received for the firms' use of labor: the main resource produced by households. They pay taxes to the state and receive the necessary transfers from it, such as pensions, unemployment benefits, student scholarships, and others.
§ Firms-- the main producers of goods and services, the main goal: maximizing their own profits. They are the main borrowers on the securities market. Firms make profits from investments in goods and services. The main expenses of firms are taxes, investment expenses and payments to households for resources.
Households and firms form private sector of the economy.
§ State-- the main producer of public goods, main goals: redistribution of national income, regulation of the economic activity of other agents and markets. Receives taxes - its main source of income, pays transfers to households and subsidies to firms, if necessary, makes purchases on the goods market. The state is inextricably in contact with the financial market.
The private sector and the state form closed economy.
§ Foreign sector-- international trade, circulation of capital and securities.
All four macroeconomic agents form open economy.
Macroeconomic markets
Market of production factors
Economic resources (or factors of production) are considered to be land, labor(labor market), physical and financial capital. Some economists also add to this list human capital: abilities, talents of people that allow increasing productivity.
Market of goods and services
It is in this market that the formation of aggregate supply and demand occurs. At the same time, demand for goods is presented by all macroeconomic agents, while supply is created by firms, the main producers of goods and services. Since real values are exchanged in this market, it is also called real market .
Financial market
Main article: Financial market
The financial market consists of:
§ Money market where the formation of supply and demand for money occurs, the study of the equilibrium interest rate and money supply
§ Securities market: the market for financial assets such as stocks and bonds
Circular flow model
Macroeconomic analysis is based on the simplest circular flow model. In its elementary form, it includes only two categories of economic agents - households and firms– and does not imply government intervention in the economy, as well as any connections with the outside world
The main conclusion from the model is the equality of the total sales of firms to the total income of households.
From the circular flow model it is clear that:
· real and cash flows are carried out unhindered, the condition for this is that the total expenditures of households, firms and the state (as well as the outside world, or abroad, for an open economic system) are equal to the total volume of production;
· aggregate spending causes growth in employment, output and income;
· the expenses of economic agents are again financed from income, which again return to the owners of production factors.
Leaks – any use of income other than for the purchase of domestically produced products.
At the same time, additional funds are poured into the “income-expenses” flow in the form of “injections” - investments, government spending, exports.
Injections are cash flows that are generated by investments, government purchases of goods and services, and payments for goods and services sold abroad. Total injections equal leaks
Subject- person, group of people, state.
Object – economic research. sciences, economic phenomena.
The subject is the life activity of people in the problems of economic management.
Economic agents are a person, a group of people, a state, playing a role in economic relations, which take part in the production, distribution, exchange and consumption of economic goods.
The subjects at the macro level are:
- The household sector, which includes all private households in the country whose activities are aimed at meeting their own needs. Households act as suppliers of all economic resources (factors of production) and at the same time as a spending group in the national economy. They are the holders of income (salaries, interest, profits). Household expenditures - taxes, personal consumption and savings. Thus, households engage in three types of economic activity: offering economic resources, consuming part of the income received, and saving.
- The business sector that performs the work of producing and distributing goods and services. It is represented by the entire set of enterprises (firms) that are registered and operate within the country. The business sector carries out the following types of economic activities: invests, offers the results of its activities, and places demand for factors of production.
- The public sector is all state-owned enterprises, institutions and agencies. The state produces public goods to meet the needs of the population, ensures the development of fundamental sciences and the implementation of national programs, the functioning of social and industrial infrastructures.
- The foreign sector, which includes all economic entities located outside the country, as well as foreign government institutions. The impact of foreign countries on the domestic economy is carried out through the mutual exchange of goods, services, capital and national currencies.
Subjects of macroeconomics take part in the circulation of resources, products and income (national economic circulation).
System of National Accounts- a system of interrelated indicators and classifications used to describe and analyze the macroeconomic processes of a country with a market economy.
The first version of the system was developed in 1951 and approved in 1953 by ECOSOC. The second version was approved by ECOSOC in 1968. The third version was approved in 1993. The current version was adopted in 2008.
Key indicators in the SNA there are three indicators of total product: gross domestic product (GDP), gross national product (GNP), net national product (NPP) and three indicators of total income: national income (NI), personal income (DI), disposable personal income ( RLD). GNP = GDP + NFA
GDP = GNP – NFA
GDP– the total market value of all final goods and services produced in the country by residents and non-residents during one year.
Double counting is the inclusion of the value of intermediate goods in GDP, resulting in multiple counting of the same good or service.
Value added - the difference between the amount of sales of the company
and the amount for which the company purchases raw materials from
suppliers. Added value eliminates double counting,
which arises from the counting of intermediate products,
goods that are completely consumed in the production of final
goods and services. In the economy as a whole, value added is equal to
the cost of the final product, that is, GDP is equal to the sum
added value of all firms.
PERSONAL CONSUMER SPENDING- individual's expenses on consumer goods and services. The magnitude of such expenses depends on personal disposable income and the prices of goods and services.
Gross Investment. These are all investments over a certain period of time aimed at developing production and increasing material, technical and commodity assets.
Net Investment It is the gross investment minus depreciation deductions over a specified period of time. Depreciation charges are funds intended for the restoration of resources spent in production, including wear and tear of equipment and its modernization
Gross Investment = Net Investment + Depreciation.
NET EXPORT- the difference between exports and imports of exported goods.
NET TAXES- taxes paid by the population to the state, minus transfer payments that the population receives from the state.
INDIRECT TAXES- taxes on goods and services, established in the form of surcharges on the price of goods or tariffs for services and not depending on the income of taxpayers (unlike direct taxes related to income).
Gross National Product- a macroeconomic indicator that includes the cost of a product created in the country itself and abroad using factors of production owned by the country.
GROSS DOMESTIC PRODUCT (GDP) DEFLATOR- price index for all final goods and services, the cost of which is included in the GDP of the country or region. Represents the ratio of nominal GDP, expressed in current year market prices, to real GDP, expressed in base year prices.
PAASCHE INDEX- an indicator of the price level, calculated on the basis of a changing set of goods. This indicator is commonly known as the gross national product deflator.
LASPEYRES INDEX- an indicator of the price level, calculated on the basis of the prices of a certain set of goods.
ECONOMIC EQUILIBRIUM- the state of the economic system, market, characterized by the presence of balance, the balancing of two differently directed factors. For example, the balance of supply and demand, production and consumption, income and expenses. Equilibrium can be unstable, short-term, and stable, long-term.
General economic equilibrium(OER) - a state of the national economy when there is a balance between resources and their use; production and consumption; material and financial flows.
Aggregate demand- the real volume of products produced in society (essentially “GDP”) that consumers are willing to purchase at each given price level in the economy.
AD = C + I + G + X n
Where AD- aggregate demand; WITH- consumer spending; I- gross domestic private investment; G- government procurement of goods and services; X n- net exports.
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. 3. Autonomous investment function, where I – investment costs; I 0 – autonomous investments determined by external economic factors (mineral reserves, etc.); R – real interest rate; d – empirical coefficient of investment sensitivity to interest rate dynamics. Factors determining the dynamics of investments: – expected rate of net profit; – real interest rate; – level of taxation; – changes in production technology; – available fixed capital; – economic expectations; – dynamics of total income. With the growth of total income, autonomous investments are supplemented by stimulated ones, the value of which increases as GDP grows. The positive dependence of investment on income can be represented as functions
, where Y is total income, MPI is the marginal propensity to invest, which means the increase in investment costs when income changes and is calculated by the formula; 
Rice. 29.3 Investment function The larger part of the increase in income is invested, the greater will be the income of society (Fig. 29.3). The main factors of investment instability: – long service life of equipment; – irregularity of innovations; – variability of economic expectations; – cyclical fluctuations of GDP. The discrepancy between investment and savings plans causes fluctuations in the actual volume of production around the potential level, as well as a discrepancy between the actual level of unemployment and the natural one. These fluctuations are facilitated by the low downward elasticity of wages and prices (i.e., if prices go down, then wages do not, since this threatens the loss of qualified workers) Government expenditures and taxes: Public, or government, expenditure refers to the costs of maintenance of the institution of the state, as well as public procurement of goods and services. Government procurement of goods and services can be of various types: from the construction at the expense of the budget of schools, medical institutions, roads, cultural objects to the purchase of agricultural products, military equipment, and samples of unique products. This also includes foreign trade purchases. The main distinguishing feature of all these purchases is that the state itself is the consumer. Usually speaking about public procurement, they are divided into two types: procurement for the state’s own consumption, which is more or less stable, and procurement for market regulation. Expenses | | | next lecture ==> | |
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Accounting is carried out through double entry in the accounting accounts. This is stated in the Federal Law of December 6, 2011 No. 402-FZ “On Accounting”. What is the essence of the double entry method? We'll talk about this in our material.
Double entry: its essence and meaning
What is double entry in accounting? Double entry is a method of accounting that underlies the formation of documented, systematized information about accounting objects.
The double entry method in accounting means that all business transactions are reflected in interrelated accounting accounts included in the working chart of accounts. The double entry method or method is also often referred to as the double entry principle in accounting, thereby emphasizing the fundamental role of double entry in the accounting system.
And the essence of the double entry method is to reflect any transaction in accounting simultaneously in the debit and credit of accounts. Moreover, depending on the type of account (active, passive or active-passive), the debit or credit of the account may reflect an increase or decrease in one or another accounting object.
The essence of double entry in examples
The concept and meaning of double entry are clearly illustrated by examples.
Thus, the withdrawal of cash from the bank to the cash desk is reflected based on the essence of double entry in the accounting entry:
Debit account 50 “Cash” - Credit account 51 “Cash accounts”
Both accounts 50 and 51 are active, respectively, the debit of account 50 reflects the increase in funds in the cash register, and the credit of account 51 reflects the decrease in funds in the current account. The amount of the organization's assets does not change, only the structure of the assets changes (non-cash money has become cash).
Double entry provides interconnection between accounts. And in fact, double entry also ensures the relationship between the organization’s property and the source of its formation. For example, the contribution of cash as a contribution to the authorized capital is reflected:
Debit of account 50 – Credit of account 75 “Settlements with founders”, subaccount “Settlements on deposits in the authorized (share) capital”
Account 75 is active-passive, and in this case its lending does not mean an increase in the organization's accounts payable to the founders, but a decrease in accounts receivable for contributions to the authorized capital. After all, the indicated posting was preceded by a record of the form:
Debit account 75 – Credit account 80 “Authorized capital”
For example, the purchase of goods is reflected by the posting:
Debit account 41 “Goods” - Credit account 60 “Settlements with suppliers and contractors”
Account 41 is active; its debit means an increase in the asset (in this case, goods). Account 60 is active-passive, the credit of this account in this case shows an increase in the organization’s accounts payable for payment for goods delivered.
The simultaneous reflection of transactions on the debit and credit of accounts ensures the equality of the balance (balance) of the debit and credit of all involved accounts of the organization as of the reporting date in the balance sheet. And therefore, it guarantees the identity in the balance sheet: Asset = Liability.
Thus, the above confirms that double entry is the basis of accounting, and its importance is difficult to overestimate.
— a necessary requirement for monitoring accounting records when reflecting business transactions. From this article, the reader will learn about the basic rules for recording financial and economic transactions in accounting accounts.
Reflection of facts of economic activity
All financial and economic transactions carried out by business entities during their work must be recorded in accounting in the form of accounting entries using special accounts that have their own unique number.
Transactions are accumulated in accounts according to a certain characteristic (for example, information on fixed assets is recorded on account 01).
Active and passive accounts
According to their economic meaning, accounts are divided into active and passive.
Active ones are used directly to account for the state and changes in the organization’s funds in the context of the types of their formation (for example, accounts 01, 04, 10, 20, 50, 51).
On these accounts, the initial and final balances, as well as increases in funds, are displayed on the debit side of the account, and decreases in funds are displayed on the credit side of the account.
Passive accounts serve to reflect the direct sources of formation and movement of the organization’s funds (for example, accounts 66, 67, 70, 80, 86).
In passive accounts, the beginning and ending balances, as well as increases in funds, are recorded against the loan. A decrease in economic assets is shown as a debit.
Double entry
All transactions directly carried out by an organization in the course of its work are reflected in the accounts simultaneously as a debit to one account and a credit to another account. This method, called double entry in accounting, provides direct interconnection of accounts, and also has a control value. The only exception to this rule is off-balance sheet accounts, which reflect property that does not belong to the organization or assets and liabilities that are not taken into account on the balance sheet. In this case, the entry reflects only acceptance or deregistration.
Example
The Omega organization purchased fixed assets in the amount of 600,000 rubles. without VAT and put it into operation.
The accountant will prepare the following entries:
- Dt 08 Kt 60 - 600,000 rub. — an object of non-current assets was acquired.
- Dt 01 Kt 08 — 600,000 rub. — the main asset has been put into operation.
- Dt 60 Kt 51 - 600,000 rub. — payment has been made to the supplier.
All facts of economic activity recorded using the method are recorded on accounts in chronological order.
At the end of the period, the sum of the debit turnover of all accounts and the sum of the credit turnover of all accounts must be equal.
Chart of accounts
To uniformly summarize the facts of economic activity using the method double entry accounting The Russian Ministry of Finance approved the chart of accounts for all economic entities. Directly on the basis of this document, the accountant of the business entity creates a working chart of accounts.
You can read more about it and, if you wish, download the chart of accounts in the article .
Accounting accounts are divided into synthetic and analytical. The names and numbers of synthetic accounts are given in the chart of accounts. Synthetic accounts serve directly to group the financial indicators of the activities of a business entity.
Business transactions directly systematized into groups on accounting accounts in monetary terms as of a certain date constitute the balance sheet. The balance sheet looks like a table and consists of assets and liabilities.
You can read about what a balance sheet is and how to draw it up in the following articles:
- ;
- .
Analytical accounts serve directly for a detailed analysis of business transactions, for example: by cost centers, by suppliers, customers, budgets, employees.
Example
In May, Omega LLC made payments to suppliers in the amount of 630,000 rubles from a current account at Sberbank PJSC, including:
- Organization "Granit" transferred an advance in the amount of 20,000 rubles.
- Organization "Market" paid for the supplied goods (tables) in the amount of 350,000 rubles. without VAT.
- The Stroika organization carried out office renovation work for Omega LLC in the amount of 260,000 rubles. without VAT, and Omega LLC fully paid for the work performed.
The accountant reflected these transactions with the following entries:
- Dt 60 Kt 51 - 630,000 rub.
- Dt 41 Kt 60 - 350,000 rub.
- Dt 26 Kt 60 - 260,000 rub.
In analytical accounting, these operations will be reflected as follows:
- Dt 60"Omega"Kt 51« Sberbank» — 20 000;
- Dt 60« Market» Kt 51« Sberbank» — 350 000;
- Dt 60"Omega"Kt 51« Sberbank» — 260 000;
- Dt 41 Table Kt 60« Market» — 350 000;
- Dt 26 Repair Kt 60"Omega" — 260 000.
Results
Double entry in accounting directly ensures the relationship of business transactions and has a control value for the equality of the totals of entries in the accounts.
First of all, let's define the concept. Double entry is a way of reflecting business transactions and economic facts in accounting, which allows you to systematize and group the facts of a subject’s economic activity according to individual characteristics.
In other words, the double entry method in accounting means the reflection of the facts of the enterprise’s economic activity on interconnected accounting accounts, which are regulated in the organization’s working chart of accounts. Consequently, one transaction must be reflected as a debit to one account and at the same time as a credit to another, and in one total amount.
Deviations from this rule violate key accounting principles.
The essence of the concept
In accordance with the provisions of Law No. 402-FZ, the principle of double entry in accounting must be applied everywhere. There are no exceptions to this rule. That is, all economic entities are required to use this principle when organizing and maintaining accounting records.
The essence of double entry is that each transaction must be reflected as a debit and a credit simultaneously on two accounting accounts. Moreover, entries are made taking into account the account attribute (active, passive, active-passive). That is, not only an increase, but also a decrease can be reflected in the debit of the account, and vice versa in the credit.
Examples
Let's look at the key essence of this principle using specific examples.
Operation: “The organization’s funds are withdrawn from the current account and deposited into the cash register for cash payments.”
Debit 50 Credit 51.
Account 50 “Cashier” and 51 “Current Account” are active. That is, the debit of active accounting accounts reflects an increase, and the credit, respectively, a decrease. Consequently, there are fewer funds in the current account - we reflect the movement on the loan, and the increase in cash in the cash register - on the debit. However, the total value of the enterprise's assets has not changed, the structure of assets has been adjusted (increase in cash, decrease in non-cash funds).
As you can see, double entry ensures the relationship between synthetic accounting accounts. But in fact, this principle shows a direct connection between the property, assets, liabilities of the institution and the sources of their formation.
Operation: “Purchase of inventories for production.”
Debit 10 Credit 60.
Account 10 “Materials” is active, and account. 60 “Settlements with suppliers and contractors” - active-passive. Therefore, according to count. 10 the increase is reflected in the debit, and for the account. 70 - the loan reflects the increase in the creditor to the supplier of materials.
The simultaneous change in the turnover of the debit and credit of the accounting accounts equalizes the balance. In other words, DZ equalizes the indicators of assets and liabilities.
Double entry in reporting
The key feature of the DZ principle, as we noted above, is the alignment of the institution’s assets and liabilities according to the accounting accounts used to reflect transactions in the reporting period. That is, when maintaining accounting according to established rules, asset indicators must be equal to liability indicators for the reporting period or as of a specific date.
If this principle is violated, it is impossible to generate reliable and complete reporting. These discrepancies will be identified in all forms of accounting without exception.
For example, if the DZ principle is violated, the balance sheet indicators (Form No. 1) for assets and liabilities will not be equal. Let's consider the form of the balance sheet of a non-profit organization:
As we can see, the asset and liability indicators of the reporting form are equal.
In the depths of the old medieval society, capitalism slowly and inevitably arose. Its bearers were brave, predatory, intelligent and ruthless people, the conquistadors of the commercial world. In the jungle of economic life, they needed new techniques and methods, more accurate and perfect guidelines. They found what they were looking for in double-entry bookkeeping.
Originating in Italy, the digraphic paradigm begins to rapidly spread in Western Europe, in this victorious march it conquers the minds of merchants and bankers, accountants and bookkeepers, entrepreneurs and statesmen, country after country.
Accounting in the homeland of double entry
At the origins of Italian accounting we find the accounting registers of Ancient Rome. At first, accounting developed almost independently in each company. Then printed books appeared, and “printed accounting” arose.
Its appearance is associated with two names: B. Cotrugli and L. Pacioli.
Benedetgo Cotrugli is a merchant from Ragusa (Dubrovnik), author of the book “On Trade and the Perfect Merchant.” The manuscript was written in 1458. Patrizi edited and published it in 1573, i.e. 115 years from the time of writing. In 1602, the second, and in 1990, the third edition of this book was published.
Luca Pacioli (1445-1517) - a world-famous mathematician, a man of universal knowledge, a student of Piero della Francesca and Leon Battista Albert, a friend and teacher of Leonardo da Vinci.
Pacioli's fame rests on the famous XI Treatise on Accounts and Records, contained in the fundamental work - "Summa of Arithmetic, Geometry, the Doctrine of Proportions and Ratios"
The treatise was published four years earlier than the books of Aristotle and eighteen years earlier than those of Plato. It has been translated into many languages, and in terms of its impact on accounting, no other work can compare with it.
But we would be severely mistaken if we reduced the entire accounting history of Italy to these two names.
On the Apennine Peninsula you can find a galaxy of brilliant researchers, whose works, now “blurred by the passage of time and indifference” (X. JI. Borges), determined the fate of our business for many years.
Purpose of accounting. L. Pacioli wrote: “Accounting is the conduct of one’s affairs in due order and as it should be, so that one can obtain all kinds of information, both regarding debts and claims, without delay.” /18/
Thus, already in the first accounting work it was emphasized that accounting is kept in order to promptly identify the amount of debts and claims (legal nature of accounting) and the proper organization of one’s affairs (economic nature of accounting). So, from the first steps, two interconnected goals arise.
Up to the 20th century. the first goal - a purely control, or, as Angelo di Pietro (1550-1590) will say, a “protective” function, will be considered the main one - the main one.
Then, starting with the work of Bastiano Venturi (1655), the goal associated with the management of economic processes comes to the fore. Venturi, in particular, believed that the accountant must determine the scope of responsibility of the administrators involved in the business and ensure the efficiency of the enterprise at minimal cost.
To achieve the goals set for accounting, it was necessary to fill out accounting registers. In this regard, for many centuries to come, all accounting was defined as the art of keeping books. Sometimes the definition was clarified and accounting was spoken of “as the art of recording the facts of economic life” (Giovanni Antonio Moschetti - 1610).
Subject of accounting. The scope of application of this art has been steadily expanding. Cotruglia and Pacioli are talking only about accounting in trade, and double entry is described in relation to this branch of the national economy.
Alvise Casanova (1558) extended digraphism to shipbuilding, A. di Pietro (1586) - to the accounting of the monastic economy and banks, while he excluded fixed assets from the objects of current accounting, the latter were taken into account only in the inventory statements; YES. Moschetti (1610) - for industry; Ludovico Flori (1636) - for hospitals, government organizations and even for households; finally, Bastiano Venturi (1655) - on agriculture.
The latter interpreted accounting as a branch of administrative law and described the subject of accounting as the practical implementation of the administrative functions of any enterprise.
Inventory. L. Pacioli wrote: “First, the merchant must compile his inventory in detail.” Both free sheets and books were allowed as registers. (Girolamo Cardano only allowed books.)
The sequence of arrangement of items in the inventory was determined by the degree of protection of property from possible losses. It was necessary to start with items “that are more valuable and easily lost, such as cash, jewelry, silverware, etc.” Emphasizing that “the entire inventory must be compiled by one time.”
Grade. The practice of that time knew various options. Thus, in the Bene company, goods were valued only at current market prices, and in the Datini company, their own goods were shown at the purchase price or at market prices; if the latter were lower, the difference was credited to Loss on goods.
Consignment goods and goods accepted for storage were taken into account only in physical terms. A slightly different procedure existed in relation to the valuation of land plots. In Datini's company they were shown at the purchase price. /10/
In L. Pacioli we find two contradictory recommendations: selling the highest possible prices and cost. The application of the first principle led to a systematic overestimation of the amount of capital and a decrease in the amount of profit shown. Acquaintance with the Treatise allows us to conclude that L. Pacioli in current accounting assumes valuation at cost. Di Pietro initiated the so-called opportunistic valuation based on sales prices. He wrote: “You will count the remainder at the price at which you hope to sell it” [Accounting, 1895, p. 49]. However, this led to distortion of financial results.
Chronological and systematic records. Current accounting was provided for in the journal and in the General Ledger.
Pacioli and D.A. Tagliente closed the resulting accounts only with entries in the General Ledger, without entering them into the journal, which deprived the necessary identity of the results of chronological and systematic entries. Domenico Mancini (1540), the first professional accountant who began to write books, by entering these entries into the journal, created the conditions for controlling the posting of accounts.
Classification of accounts and double entry. The first attempts to classify accounts can be found in Italian authors.
D. Mancini, who sincerely believed that a person not familiar with double-entry bookkeeping is not much different from cattle, divided all accounts into living (settlements with individuals and legal entities) and dead (material and monetary values).
In the future, this classification will remain until the 20th century. under the name of personal and material accounts.
This classification is eclectic, but from it, in essence, two theories will arise - legal(interpreting the first accounts as living ones, i.e., transferring the object of accounting from values to people involved in economic processes) and economic(interpreting living accounts as dead, i.e. focusing on the fact that the object of accounting is values, and not people with their responsibilities and rights).
Flory classified all accounts into four groups:
capital;
nominal (operational) accounts;
trading accounts (material);
settlement accounts.
The group of operating accounts is significant; Flory recommended assigning to them amounts that are not clear to which specific object should be attributed. (For example, it is usually unclear where to allocate overhead costs.)
In the middle of the 18th century. Pietro Paolo Scali (1755) divided the accounts into three groups:
Own (capital, profit and loss, results);
Property;
Correspondents, i.e. debtors and creditors. / Accounting, 1895, p. 50/
For D. Mancini and his followers, personal accounts were only part of personal accounts.
All accounts must be linked by double entry. Giovanni Antonio Tagliente (1525), having introduced the name “double-entry bookkeeping,” emphasized that if there is no double entry in accounting, then there is no basis for accounting.
However, how to explain the nature of double entry remained unclear.
L. Pacioli gave a personalized approach, the essence of which can be reduced to the fact that accounts that take into account inanimate objects are considered as accounts of individuals.
G. Luzzato wrote that “the double aspect of each operation became possible because not only persons, but also objects began to appear as debtors and creditors.”
Balance. By the end of the 14th century, medieval merchants compiled balance sheets not only to control turnover. Merchants and bankers begin to use the balance sheet as a tool for controlling and managing the economy.
In the Medici company, each branch annually, on March 24, drew up a balance sheet, which, together with an explanatory note from the manager, was sent to the main office in Florence, where overdue receivables were identified and requests were made to the branches.
The same request was made in the case of excessive loans that threatened to undermine the company's ability to pay. Sometimes a certificate about the prospects for repaying the debt was attached to the balance sheet.
The absence in accounting practice of dividing accounts into synthetic and analytical led to the balance sheets of medieval firms being overloaded with items.
Thus, the balance sheet of the Bank of St. George on January 1, 1409 contained 95 items in assets and 310 in liabilities. /Roover, p. 32/
The balance sheet of the Barcelona branch of the Datini company (as of January 31, 1399) - more than 110 items in assets and about 60 in liabilities.
Accountant. Already in the 16th century. The idea of the legal status of an accountant - an accountant - arose.
In 1558, A. Kazakov wrote: “The position of a notary is furnished with certain guarantees; for the common good, the same should be required from bookkeepers before allowing them to keep books, since their duties are no less important than the functions of a notary; on the contrary, they even have greater significance, because notaries are not given faith without witness certificates, and bookkeepers’ books are trusted without any other certificates.”/Quoted: Accounting, 1895, p. 106/
This requirement remained a good wish, because in those days accounting was inseparable from a person, from an accountant, and the requirements for an accountant corresponded to knowledge about accounting. Di Pietro, for example, believed that an accountant should:
be able to be smart;
have good character;
clear handwriting;
have professional knowledge;
to be power-hungry and ambitious;