Accounting

Employee contributions to social security are deducted directly from the salary (accounting entry: payroll expense/creditors). Employer contributions are recorded through the expense account (social benefits/creditors).

Small businesses use open-item accounting without individual debtor/creditor accounts and instead keep two folders each for outstanding and paid invoices. Outstanding invoices are totaled for the year-end inventory, and paid invoices are recorded upon receipt or payment.

Purchases are directly recorded as cost of goods expense, appropriate when the items are sold within the same period; the inventory remains invisible. Sales are recorded daily based on the cash register tape, thereby avoiding additional entries.

Inventory management is carried out by individual recording of goods purchases; sales generate two booking entries and show the current inventory value. The method continuously captures inventory discrepancies, enables a current inventory overview, and provides precise sales analyses.

Companies can record purchases of goods either as an increase in inventory or as cost of goods sold. Method 1 is more precise but increases the number of entries, while Method 2 is preferred by smaller companies to reduce the workload.

Inventory discrepancies are deviations between inventory according to accounting records and actual stock levels, caused by incorrect bookings, theft, or natural shrinkage. These discrepancies often lead to inventory shortages, which must be accordingly accounted for in the bookkeeping.

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.