Accounting

Cost prices change; they can be recorded through average price calculation or the FIFO method. Both methods help to account for price fluctuations in accounting.

The article explains discounts and cash discounts in trade: Discounts are price reductions such as quantity or defect discounts, cash discount is a deduction for quick payment.

Goods receipt inspections are essential; details such as quality and quantity must be accurate. When selling large-volume products, electronic recording using scanners is common.

The accounting for purchasing and selling uses three main accounts: inventory, cost of goods sold, and sales revenue, whereby costs are recorded through purchase prices and selling prices. Inventory captures changes in stock, cost of goods sold captures consumption, and sales revenue captures revenues from sales.

The gross profit, calculated from sales revenue minus cost of goods sold, serves to cover overhead costs and for the calculation of net profit. This is central to assessing a company's cost and pricing strategy.

The general partnership distributes profit shares at the end of the year per capita, provided there is no loss; losses reduce the capital account, and profits can only be distributed after compensation.

A sole proprietorship consists only of the owner, which is why no assets of others need to be considered at the end of the year. Year-end transactions include profit transfers to equity and adjustments of the private account to equity.

In the annual financial statements, all assets and liabilities must be assessed according to the valuation regulations set out in the law of obligations, where the principle of prudence is central. Here, assets may be valued at a maximum and debts at a minimum in order to meet creditor protection and fiscal objectives.

Hidden reserves in business administration: compulsory reserves arise by law, discretionary reserves through conservative estimates, arbitrary reserves serve to influence profits.