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Introduction .............................................................................................................................. 2
I. The accountancy ..................................................................................................................... 3
   I/1. The financial accounting ................................................................................................. 4
      I/1.1. The report ................................................................................................................. 8
      I/1.2. Bookkeeping ............................................................................................................ 8
      I/1.3 Audit ....................................................................................................................... 10
      I/1.4 Making publicity ..................................................................................................... 10
   I/2. The management accounting ........................................................................................ 10
      I/1.1. The report ............................................................................................................. 11
         I/1.1.1. The balance sheet .......................................................................................... 13
            I/1.1.1.a) The entrepreneurial property staus...................................................... 16
            I/1.1.1.b) Balance sheet items ............................................................................... 18
            Tasks..................................................................... Error! Bookmark not defined.28
            I/1.1.1.c) The inventory ......................................................................................... 32
            Tasks..................................................................... Error! Bookmark not defined.35
         I/1.1.2. The operating income statement ................................................................. 36
         Tasks......................................................................... Error! Bookmark not defined.41
         I/1.1.3 Appendix......................................................................................................... 48
         I/1.1.4. Business report .............................................................................................. 49
II. The accountancy documents ............................................................................................ 50
III. The evaluation .............................................................. Error! Bookmark not defined.55
IV. Economic events, economic operations ..................... Error! Bookmark not defined.58
V. The ledger account ....................................................... Error! Bookmark not defined.66
VI. Systematic chart of accounts ...................................... Error! Bookmark not defined.69
VII. The process of bookkeeping ..................................... Error! Bookmark not defined.71
Summation ........................................................................... Error! Bookmark not defined.76
VIII. The single-entry bookkeeping................................. Error! Bookmark not defined.78
   Tasks................................................................................. Error! Bookmark not defined.86
Appendix ............................................................................. Error! Bookmark not defined.91




                                                                     1
Introduction




The humanity have brought itself the demand with changing and recreating its environment
for thousands of years. It tries to know the reality, in order to create its own life circumstances
depend on its imagination by useing the experience. The man of the antiquity has already
preserved his own thoughts, the changes in his territory. He did it into stone and clay boards
and papyrus coil.


The ancient philosopher, Hermész Triszmegisztosz says, that the operation of the whole world
has an effect on the individual and the activity of the individual has an effect on the moving of
the world. This sentence is persistent and also true for the man of the XXI. century. The
culture developed a lot from on hand, but the essence is the same like thousand years ago:
written or unwritten rules leads the human relationships int he right way.
It is extremly true for the economy, the economic subject and the recording of the connected
event.
They make laws, rules, orders in order to defend the intrests of the man.




                                                2
I. The accountancy



In Hungary by the creation of the market economy more and more economic subjects start
and finish its operation. Some entrepreneur enter to the business world from his own fortune,
others do it with the help of investors.
The fortune is the summa of material and non-material stocks of the venture.
By the fortune the entrepreneurships invest in order to create such manufactured product or
service, which meets the requirement of the consumers. Everything starts with the consumer
and those solvent neccesities, which the company would like to supply.
Dealing with anything the activity and the connected cash flows, assets changings has to be
recorded in order to be followable every changes and to be able to say in the end of the term
or terms, that connecting to the activity, how big the income, the cost, the result and the value
of the credits and commitments. It has to be planned from the tendencies of the past and the
events of the present, what the plans are for the future. All of it we have to do in a detailed
way.
In order to the market economy works well it is essential, that the performers of the market
can get inner and outer information, which are necessary into their decisions. We can make
good decisions, if the information is real and reliable.


The accountancy: the showing system of the activity and the operation of the economical
organisations.


The typical properties of the accountancy infromation system:
a.) it follows, observes, measures, records and writes down the economic events in the
economical organisations,
b.) it gives reliable information for the actors of the market economy and the leaders of the
economical organisations,
c.) it makes its records in its own, closed system,
d.) it collects the information into a report, which is available for everyone,
e.) it uses the standards of the international organisations and the accountancy guidelines of
the Europaen Union.




                                                3
The function of accountancy:
a.) informing, which can be inner or outer,
b.) communication: the common language of the actors of the economic life,
c.) protection of the fortune: protecting and preserving the fortune of the owners.


The fields of accountancy:
a.) financial accounting – secures the outer information flow – provides information to the
performers of the market in a uniform, avarage form, which is ruled by law. (Accountancy
Act)
b.) management accounting – secures the inner information flow – provides information for
the leader, managers of the company in the base of the inner regulation.


The methods of measuring in the accountancy:
a.) the natural measure,
b.) the value,
c.) the economic technical measure (tonnakilometer, flying hour, etc.).




I/1. The financial accounting

The reported information in the accounting has to be realiable, available and authentic. These
conditions are guarenteed by the Accountancy Act.
The aim of the Accountancy Law: securing objective information for the performers of the
market about the economical organisations’ financial case, property status, earnings position
and the changings of these.
Determines for those, who are under the effect of it:
    -   The reporting and accountancy liability,
    -   The composition of the report,
    -   The main acts and rules, which can be used,
    -   The requirements of making public, disclosure and accountancy.




                                               4
The strucure of the Accountancy Act:




        THE STRUCTURE OF THE ACCOUNTANCY ACT 1.


I. chapter: Ordinary disposals
 - the aim of the law
 - the effect of the law
 - explanatory disposals, concept
II. chaptert: Reporting and accountancy
 - reporting obligation
 - accounting obligation
 - accounting rules
 - business year
IV. chapter: Simplified annual report
 Parts of it:
 - the content of the balance sheet
 - the content of the operating income statement
 - the content of the appendix
 - the conditions of making a simplified annual report
V. chapter: Simplified report
 - ordinary rules
 - the balance sheet
 - the operating income statement
VI. chapter: Contracted annual report
 - obligation of making concentrated annual report
 - the form and content of it
 - the methods of consolidation
VII. chapter:Special reporting obligation
   - the period of pre-company
   - the transformation of economical organisations
   - other transformation




                                             5
       THE STRUCTURE OF THE ACCOUNTANCY ACT 2.


VIII. chapter: Accounting service
IX. chapter: Making public and disclosure
   - consigning
   - disclosure
X. chapter: Accountingy
   - the aim is the accounting obligation
   - accountancy report and accountancy clause
XI. chapter: Accountancy, vouchering
  - double-entry bookkeeping
  - the systematic chart of accounts
  - system of accounts
  - simple bookkeeping
  - the changes of bookkeeping systems
  - bookkeeping closure
  - the documentary principle and the voucher discipline
  - accountancy vouchers
  - strict statement obligation
  - preservation of vouchers
XII. chapter: Law consequences
XIII. chaptert: The Territorial Accountancy Committee
    Appendix (balance sheet patterns, operating income statement patterns, cash-flow
patterns)
XIV. chapter: Closing disposals




The effect of the acccountancy act covers the economic subjects.
Economic subject is the
   -   entrepreneur: producer, service provider entrepreneurship, financial, investor
       entrepreneurship, credit institution, insurance institution,
   -   the organs of the public finance: the organs of the central budget, local governmental
       organs, social insurance funds, separated funds,
   -   Hungarian National Bank,


                                                6
    -   Other organisations: flat cooperative society, condominium, social organistaion,
        spiritual legal personality, foundation, public endowment, lawyer office, stock
        exchange, public company, public bounded warehouse,
    -   By the above mentioned and natural personalities founded health, social and
        educational institute.


The effect of the act covers not:
- the sole proprietors,
- the civil law company,
- the building community,
- private people,
- the commercial representation of a foreign entrepreneurship in Hungary,
- those economic companies, which don’t have legal personality and lead their registration
depends on the legal intsructions of the simplified entrepreneurial tax.


Before talking about the stocks let’s see some definitions:
Economy: activity for organising the parts of the social reproducing process and giving the
necessary material resources to the different parts of the process.
Economic subject: a legal or natural personality, who deals with economic activity.
Entrepreneur: all of those economic subjects, which makes producing or service providing
activity in its own name and risk in order to gain fortune and profit from the activity.
Producing activity: materials, products producing, creating.
Service: an activity, which is not touchable and the service making and using is in the same
time partly or entirely.
The entrepreneurs makes their activity in different entrepreneurial froms:
        - public company
        - limited company – Ltd.
        - cooperative society
        - limited partnership
        - general partnership
        - state companies, etc.




                                                7
The fields of the financial accounting:
        1. the report and the basis of its originty (bookkeeping, inventory),
        2. the bookkeeping and the basis of its originity (voucher system),
        3. the bookkeeping (the institute, which guarantee the reliability of the report)
        4. publicity.


I/1.1. The report
Definition: report about the annual operation of the entrepreneurship and its financial case,
property status and earnings position.
Parts of it:
        ~ Balance sheet
        ~ Operating income statement
        ~ Appendix
The business report is not the part of the report, buti t has to be prepared in the same time as
the previously mentioned ones.


I/1.2. Bookkeeping
Definition: that activity, in which the economic subject continously records and at the end of
the business year closes the economic events, which has any effect on the financial case,
property status and earnings position.


Bookkeeping based on the accountancy act can be:
         - double-entry bookkeeping: it shows in details continously in a closed system the
        changes in the fortune of the entrepreneurship. Every economic event is recorded on
        ledger accounts. The ledger accounts substitute for the rows of the balance sheet and
        the operating income statement.
        Non of the economic event can be missed, which has any effect on the property status
        or the result of the company.
        During the leading of the double-entry bookkeeping all of the records should be
        confirmed by voucher, which secures its originity.




                                                8
   -      single-entry bookkeeping: cash flow based, it shows the financial resources of the
          company and the changes in them. (For some organisations with some conditions the
          governmental order alllows to use the single-entry bookkeeping.)
          The single-entry bookkeeping has a determinated reporting type which is the
          simplified balance sheet.


Notice:
The sole proprietors don’t belong under the effect of the accountancy act, but for them the
personal income tax law pescribes administration exposure.
The personal income tax law rehearses the next basic registrations:
          The registration costs of the single-entry bookkeeping:
               General journal: for other organisations, if their annual income is under 50
                  million Ft in two consecutive years.
               Cash journal: for the sole proprietors, under 50 million Ft
          Inside of the income registration:
               Leading of the income and cost registration: for private people, it sees the
                  costs also besides the income in order to know the earnings.
               Leading of the income registration: only the revenues should count. For sole
                  proprietors in case of flat rate tax.
The basic documents of the bookkeeping are the bookkeeping documents, which confirm the
bookkeeping records. All of the bookkeeping items should have a record basis. The
bookkeeping can be made only Hungarian.


The realization of bookkeeping has more steps:
1. Analitical accounting: detailed measure and value registration. The effect of the economic
event for the result and the financial case gets from the series of analitical registartions to the
report.
2. Ledger accounting: aggregated report, it’s just value registration. The value registration is
syntetic registration. It means the registration of the analitical accounting. The analitical
accounting prepares registration for the ledger accounting in determinated period of time of
the accounting happens parallel. Already precollected, aggregated datas are accounted on the
ledger accounts.




                                                    9
The difference between single-entry and double-entry bookkeeping:
In content: the single-entry bookkeeping records just the cash flow, the double-entry
bookkeeping follows, measures and records all of the economis events happened at the
entrepreneur.
In the method: the double-entry bookkeeping uses ledger accounts and the single-entry
bookkkeeping uses general journal, financial journal and other registartions.


I/1.3 Audit
The aim of it: to realize if the report was made ont he basis of the accountancy law and gives
a reliable, real picture about the entrepreneurship or not.
The correspondence of the annual report and the connected datas should be checked. The
audit is compulsory for those entrepreneurships, which are leading double-entry bookkeeping,
expect those entrepreneurships, whose annual income is not more than 50 million Ft in the
average of the two years, which are before of the business year.
The audit can be only made by an independant auditor or auditor compnany, about which
should be made an auditor report.


I/1.4 Making publicity
The leader of the double-entry bookkeeping, entrepreneurship registered into the trade register
should the accepted report, in case of compulsory audit with the report of the auditor, should
be consigned within 150 days from the accounting date in the competent registry court.
The consigned reports are public, about them anybody can get information and make a copy
on the registry court.
The making publicity process happens in the same time like the consigning of the report, it
comes true with sending the documents to the Court Registartion and Information Service of
the Ministry of Justice.



I/2. The management accounting

The management accounting provides information about the inner processes of the company
to the leaders of the entrepreneurship by using the datas of the financial accounting. Against
the fields of the management accounting the accountancy law uses requirements. The
methods of the management accounting should be created properly to the activity and the


                                                10
requirements of the entrepreneurship. The information system should be created in that way
that the leaders can make the best decisions depend ont hat infromation.


I/1.1. The report


The economic people, who belong under the accountancy law should make an annual report
about their operation, financial case, property status, earnings position.


The report can be:
    1) Annual report
    2) Simplified annual report
    3) Consolidated report
    4) Simplified report


The requirements against the report:
        - it must be prepared about the business year,
        - it has to show a relibale picture about the financial case, the property status, the
        earnings position of the economic person,
        - comparison of the reports of the each other following business year has to be
        secured,
        - it has to be prepared in the right structure, details, form in Hungarian,
        - datas should be in thousand Ft (if the balance sheet value of the economic person
        more than 100 Billion Ft, the datas should be in million Ft).
The business year: that period of time, about which the report is made. The business year is
usually the same as the calendar year – from the 1st of January until the 31st of December –
but it can be different also.
It can be different in the following cases:
    -   Foreign seat companies, which have Hungarian subsidiary, if it is different at the
        foreign seat company also,
    -   European Ltd.
The period of the business year is 12 calendar months.
It can be shorter than 12 months in the following cases:
        - precompany period,



                                                11
        - the first business year after the precompany period,
        - in case of transformation,
        - in case of the final settlement of the company.


1) The annual report
Parts of it:
        a.) Balance sheet: accountancy document, it provides information for the actorsy of
        the market about the financial case, the property status and the earnings position of the
        entrepreneurship and the result of the business year.
        b.) Operating income statement: it contains the expenditures and revenues of the
        entrepreneurship, shows the main actors, which hava any effect on the result, the
        deduction of the tax-paid and the balance sheet based result.
        c.) Appendix: it contains the necessary numbers and information to show the financial
        case, the property status and the earnings position of the entrepreneurship.
The business report is no the part of the annual report, buti t should be made int he same time.
Made by: all of those entrepreneurs, who lead double-entry bookkeeping, who don’t choose
the simplified annual report.


2) The simplified annual report
Parts of it:
    a.) Balance sheet
    b.) Operating income statement
    c.) Appendix
It can be prepared by those double-entry bookkeeping making entrepreneurs, whose 3 indexes
in the two previous years are not more than to following critical values:
    -   The balance total is not more than 500 million Ft,
    -   The net income of the annual sales is not more than 1000 million Ft,
    -   The number of the employees in the business year cannot be more than 50.
Cannot be done a simplified annual report if the conditions fulfil:
    -   Ltd.,
    -   Entrepreneurship, which is int he consolidation,
    -   A foreign seated entrepreneurship’s Hungarian subsidiary,
    -   That entrepreneur, where the business year is different than the calendar year.



                                               12
3) The consolidated annual report
Parts of it:
    a.) The consolidated balance sheet
    b.) The consolidated operating income statement
    c.) The consolidated appendix
The consolidated annual report is not the part of the consolidated report, buti t should be
prepared int he same time.
It has to do those entrepreneurs, who are leading double-entry bookkeeping, which can be
parent company in its relation to one or more entrepreneurships.


4) The simplified annual report
Parts of it:
    a.) Simplified balance sheet,
    b.) Simplified operating income statement.
The entrepreneurs cannot choose this form, just some other organistaions ont he basis of the
accountancy law. For example: foundtaions.
The use single-entry bookkeeping.


I/1.1.1. The balance sheet


The balance sheet is a statement of affairs. An accountancy document, which shows the
property status of the company. The compulsory part of the report.
Typical for it:
    -   It shows the property status of the entrepreneurship in a determinated date (the balance
        date can be found on the upper part of the balance sheet)
    -   It shows the property stautus of the company in double projection:
               a.) The assets’ function in the usage => ASSETS
               b.) The origin of the property = > LIABILITIES
    -   The summation of the assets and liabilities should be equal in the balance sheet (all of
        the assets have liability),
    -   Int he balance sheet the property elements have a proper order, they are in a
        consolidated from,
    -



                                               13
    -    The balance sheet should be complete (all of the property elements should be int he
         balance sheet),
    -    The method of measuring happens in money value, which is in thousand Ft (or million
         Ft), or in duty free fields, non-resident companies in currency,
    -    It is made in form of comparison with the previous period of time (it stands from 3
         columns: previous period, the modified previous period, the present period),
    -    The attestor document of the balance sheet is the inventory, which is also a kind of
         statement of affairs,
    -    The person, who represents the entrepreneur, can sign the balance sheet,
    -    Independent auditor can attest the relability and the reality with a clause.


It can be chosen from the two types of the balance sheet:


1. „A” type: two sides


                                         Balance sheet
Assets              200…     …………………..month ……….day                              Liabilities
A) Fixed assets                                           D) Equity
B) Current assets                                         E) Specific reserves
C) Prepayments                                            F) Obligations
                                                          G) Accrued expenses
All assets                                                All liabilities
Date                                                            signitures


    It can be found: 1. appendix




                                                 14
2. „B” type: step by step


                       Balance sheet
         200…       …………………..month ……….day
Assets
A) Fixed assets
B) Current assets
C) Predetermination
All assets
Liabilities
D) Liabilities, which are receivable within a year
E) Accrued expenses
F) Current assets - short term liabilities
   (B+C-D-E)
G) The total value of assets after the deduction of the within
one year receivable liabilities (A+F)
H) Longer than on year long liabilities
I) Specific reserves
J) Equity
Date                                           signitures


The built of the „B” type balance sheet form is step by step, the beginning of it is the same as
the „A” type balance sheet form’s assets side, and in continuing the liabilities the different
balance sheet rows are conversely, if we compare them to the „A” type (the diffrence is that
after the within on year recevable liabilities there are the total liabilities and there are two
technical rows).


You can see it: 2.appendix


As there is no such asset value int he balance sheet, which wouldn’t have a liability (the same
thing, the property is that, we put into two places), that’s why there is the following equality,
which we call the balance sheet equality.
                  The value of the total assets=The value of the total liabilities




                                                     15
The breakdown of the balance sheet:
-   Balance sheet main groups -> marking by: big letters of the abc
-   Balance sheet groups     ->marking by: Roman numbers
-   Balance sheet items (balance sheet rows) - > marking by: Arab numbers
The law allows the summation of the rows of the balance sheet, but just until those rows,
which are marked by Roman numbers.
The empty rows, where the balance sheet item’s value is 0, can be missed.


I/1.1.1.a) The entrepreneurial property staus
The entrepreneurial property is the summation of the different material and non-material
items, which are necessary for the activity of the entrepreneurship.


The property of the venture can be examined from two sights:
1. Based on the function of it, its part in the production ,its appearance => ASSETS: they
    are the appearance of the entrepreneurial property.
2. (financial) Based on the originity of it => LIABILITIES : the originity of the property,
    the financial basis of the entrepreneurship.




                                        The entrepreneurial
                                             property

    Based on the appearance:                                           Based ont he originity:

              ASSETS                                                        LIABILITIES
A) Fixed assets                                                 D) Equity
B) Current assets                                               E) Special reserves
C) Predetermination                                             F) Liabilities
                                                                G) Accrued expenses



Assets:
If we don’t see the predetermations (as their basis is in calculation), then we can make
difference between the two main groups of the assets: the fixed assets and the current assets.
The entrepreneurship has to determine the expected usage time and the act of the assets in the



                                               16
life of the entrepreneurship. There are some factors, which have effect on the expected usage
time:
-   the function of the assets,
-   the quality of the assets,
-   the usage circumstances of the assets, etc.
The fixed assets are those assets, which serve the entrepreneurial activity more than one year
long and the current assets are those assets, which serve the activity shorter period of time,
than one year.


Liabilities:
If we don’t see the special reserves and the accrued expenses (as their basis is in calculation), then
we can make difference between two main groups of liabilities: the equity and the liabilities.
The difference between the two groups of liabilities is the following:
    -   The equity is given by the owners (investors) of the venture and without any time
        limitation is available for the company (there is no paying back obligation).
    -   The liabilities appear as debt in the company, which have to pay back in a shorter os
        longer period of time. The lent liabilities or the temporary liabilities can also be debts.
        For example: bank credits, loans, etc.


The connection between the assets and the liabilities:
ASSETS                              thousand               LIABILITIES                              thousa
                                        Ft                                                          nd Ft
Fixed assets                            1 400              Equity                                   1 510
Current assets
Total assets                            2 200              Total liabilities


Solution:
ASSETS                              thousand               LIABILITIES                              thousa
                                        Ft                                                          nd Ft
Fixed assets                            1 400              Equity                                   1 510
Current assets                               800           Liabilities                                   690
Total assets                            2 200              Total liabilities                        2 200




                                                   17
The value of the total assets is the same as the value of the total liabilities!
The cause of it:
-     All of the assets have liability.
-     Or: The assets and the liabilities don’t mean two different thing, than the same thing, the
      property of the venture from two different views.


So:                              The value of the total assets=the value of the total liabilities

                                                 …………….           =           ………………

                                            M:       2 200        =            2 200


If we break down the liabilities:          The value of the total assets=equity+liabilities
                                                    ………………=……… + ………
                                            M:          2 200     =       1 510 + 690


Rearranged:                         Equity=The value of the total assets-liabilities

                                          ………. =        ………….         -       ………….

                                    M: 1 510 =            2 200           -    690


This way we can get a value of the equity, which we can also call net value of assets – the
value of the equity. It shows that asset property, which comes from the equity of the
entrepreneurship, so doesn’t have any debit. => the own property of the entrepreneurship!


I/1.1.1.b) Balance sheet items


ASSETS:
A) Fixed assets: those iems, which serve more then one year long the operation of the
company.
The types of fixed assets:
      I. Immaterial items
    II. Material items
    III. Invested financial items.




                                                   18
I. Immaterial items: are those negotiable, non-material items, which serve for a longer
   period of time and directly the operation of the entrepreneurship.


Types of it:

1. The activated value of the foundation and the reorganisation: with the foundation,
   expansion, creation, reorganisation connected value of costs. For example: the costs of
   foundation, the creation and reorganisation costs of the business, profile plan, etc.

2. The activated value of a researchal development: it is the reserchal development’s that
   kind direct cost, which is activated product (immaterial product, material item pr
   inventory) cannot be counted in the direct cost price, as the cost of it is more, than the
   market price of the product. For example: product development costs, production
   development costs.
3. Property value rights: it means the right of common of the assets. The owner of the asset
   gives through the right of common, while he or she is still the owner of the asset. The
   entrepreneurships get just the right of common for their money. For example: rental right
   (which is not connected to immovable), right of common, game rights, leasing, etc.
4. Immaterial products: which is the result of intellectual work and with using this we can
   create material items. Belongs here for example the computer softvers, investigations,
   know-how, production methods, industrial samples, patents, brands, etc.

5. Business or company value: the most simple way of the formation of it is, when a
   company buys up another company and the paid buying price is higher, than the bought
   up company’s equity’s market. The positive difference of the two values is the company
   value => goodwill.
   The company value can come from for example the reputation of the name of the
   company, the reputation of the brand, the geographical location, the market share, the
   skills of the leaders and workers, etc.
    - The company value can come from other ways. For example by buying up a company
    partly or buying stocks in case of Ltd.-s.
    - The company value can be also negative! (buying price < market value of equity =>
    badwill)
6. Advance payments for the immaterial items: paid amount of money for the suppliers,
   advance payment before the arrival of the bill.




                                                 19
7. Value correction of immaterial items: the positive value difference between the actaul
   market value and the book value of the property value rights and the immaterial products.
   It moves always together with the evaluation reserve on the liability side.


II. Material assets: those kind of material (and non-material) items, which serve directly or
   indirectly and for a longer period of time the operation of the entrepreneurship and during
   that time they lose their value.
Types of it:
1. The immovables and the connected property value rights:
   Immovable: the field and every assets, which has permanent connection to the field. These
   assets are: bulidings, agricultural lands, parcels, plantations, woods, bulidups.

   Property value rights connected to immovables: for example: rent right of a building, filed
   using right, mining right, usufructuary right, etc.

2. Technological machines, equipments, vehicles: the assets, which serve the activity of
   the entrepreneurship permanent and directly. For example: production machines, tools,
   vehicles, process leader computers, etc.

3. Other equipments, machines, vehicles: they serve the activity of the entrepreneurship
   permanent, but just indirectly. For example: office furnitures, office machines, vehicles,
   personal computers.

4. Pedigree sires: here remains the bred or in other form used animals (for example:
   workhorses). In order to the law: those animals, which produce such product, that can be
   detached during the breeding, the costs of keeping of these products can come back, when
   we sell them or use them any other ways (riding). It doesn’t depend on how long they
   serve the activity of the entrepreneur.

5. Investments: that amount of money, in which remain the buying and creating of the
   material asset. So those material assets, which are not yet used, or not yet operate. For
   example: a buliding during the building period, a machine under reparation, car supplying,
   etc.

6. Advance payments for the investments: the advance payments to the suppliers remain
   here.




                                               20
7. Value correction of the material assets: immovables, technical machines and other
       equipments, the positive value difference between the market value and book value of the
       pedigree sires. (it moves together with the evaluation reserve on the liability side).

III.          Invested financial assets: those assets, which are invested or given into other
              entrepreneurships in order to:
              -   Get permanent income
              -   And get influence, controll and checking right.


Types of it:
1. Shares: property parts in other ventures (for example: stocks, business parts, etc.). The
       aim is to get dividend from the profit of the company and controlling, checking right.

2. Stocks: bought stocks in order to make permanent investments (for example: state bonds,
       treasury notes, depository receipts, dock warrants, compensation warrants, etc.) The aim is
       to reach the interest income. These stocks are permanent debt securities.

3. Given loans: into other ventures or private people given for more than on year long
       period of time loans. The permanent illiquid money, which is on our bank account
       remains here also. The aim is to get interest income and influence. For example: given
       loan to a business partner, long term bank deposit, loan for flat buying to the employees,
       etc.


       An entrepreneurship with common leading: it is that entrepreurship, where the parent
       company and another company has rights (votes) in a parity basis.
       Joint entrepreneurships: it is that entrepreneurship, where the parent company has a big
       share, with this it is able to practice influence. For this the parent company should have at
       least the 20% of the votes. (at credit institutions 10%).
       Entrepreneurship in other sharing situation:          it is that entrepreneurship, where the
       strength of the parent company is under than 20%.
       Joint venture:: the parent company, the subsidiary, the entrepreneurship with common
       leading and the joint entrepreneurship.


4. The value correction of the invested financial assets: the positive value difference
       between the actual market value and the book value of the permanent shares.



                                                    21
B) Current assets: those assets, which serve the activity of the venture for shorter period of
    time, than a year.
    The current assets’ have four groups:
        I. Inventories
        II. Demands
       III. Stocks
       IV. Financial assets


I. Inventories: those material assets, which directly or indirectly no longer than 1 year serve
  the activity of the company, as they will be recreated or sold within one year.

Types of it:
1. Materials: those assets, which are usually take part in just one production process. They
   lose their origin form, their value go to the value of ready products or services, they are
   used for creating the selling product or service. For example: basic materials, fuels,
   administrative materials, building materials, etc.
2. Unfinished production or semi-finished goods:
   Unfinished product: in the date of the examination at least one working process has been
   done on the product and now it is also under working on it. For example: a product under
   working on it.
   Semi-finished goods: those own work products, which are still in production, but they
   can be sold. For example: the engine at car production, which can be sold independent
   also, but here it will be built into the car.

3. Pups, fatstocks and other animals: those animals, which cannot be counted into the
   pedigree sires, as they are kept not for breeding. For example: feeder cattle, pig, etc.

4. Manufactured products: those products, which are manufactured by the company and
   which go through the working procedure, meet the quality requirements, keep in
   inventory, can be sold. For example: ready furniture, clothes, shoes, food, etc.

5. Goods: those inventories, which are bought by the company in order to resell them. For
   example: retail trade and wholesale trade goods.
   We can count here the returnable packagings – those packaging materials, which preserve
   the goods (products) during the carrying process (for example: bottle, box, container) -



                                                   22
   and transmitted services - the company bought it in its own name, but would like to resell
   it in the same form (for example: travel agency, which deals with luggage and accident
   insurances).

6. Advance payments for inventories: to the suppliers given money for this aim.

   The inventories can be put into groups in the following ways:
       -   Bought inventories: materials, goods,
       -   Own work inventories: unfinished production and semi-finished products,
           manufactured products, pups, fatstocks and other animals.


II. Demands: paying requirements from different contracts or legal orders, which are
  connected to those fulfilments, that are recognized by the other person. => legal, by the
  other person recognized demand for money.

We can count here:
       -   Demands from goods carrying, service, so trade debtors: the buyer buys a
           product or service and the offset of it will be paid just in a later time.
       -   Bills receivables: if the buyer gives bill instead of paying the demand (this time
           the buyer has to pay interest also), the venture cannot make its demand, so creates
           bill.
       -   Other demands: state budget demands (for example: subsidies), other
           entrepreneurship demand (for example: short term loans), employee demand (for
           example: advance salary), reimbursable taxes, etc.


III. Stocks: in the aim of selling, temporary, not for a permanent investment bought stocks.
The aim is usually to gain interest income or market profits. We can count here the not longer
than on year stocks, the own business parts.
Types of it:
       -   Investments, which mean ownership share: shares, the bought back own stocks,
           the buisness parts,
       -   Stocks, with which the aim is to sell them: forgatási: bonds, treasury notes,
           depository receipts, dock warrants, investment certificates, etc.




                                                23
IV. Financial assets: the cash, which can be used to pay with it, the cheques and the bank
deposits.
   - Cash: it has to show out here the cash, which is in the checkout of the entrepreneurship
   and the amount of the electronical financial assets.
   - Electronical financial assets:
             Reloadable paying asset – computer memory or value preserving card - on
               which the value can be hold to make possible to the owner of the asset to make
               different paying processes with it,

             The emitter is credit institution,

             It is able to offset more company’s products’ and services’ offsets.

   - Cheques: written warrant for payments, the value of those cheques, which are in the
   entrepreneur’s ownership and he or she hasn’t cleared them yet. For exíample: cheques
   card, credit card, credit letter, travel cheques, etc.

   - Bank deposits: at credit institutions (commercial banks) left financial assets, without
   fixed period of investment or shorter period of time, than a year.

            * deposit account for settling of accounts: these are resources to help the
            business cash flow of the entrepreneurship. An etrepreneurship can have more
            accounts.

            * isolated deposit accounts: these are the resources, which are isolated at the
            banks for a specific aim. For example: resources came from bond issue, isolated
            resources for development, etc.

            * foreign exchange deposit account: it’s a deposit account for transacting the
            cash flow of the resouces, which are in foreign currency.


C) Predeterminations: corrections, titles, which modify the result in the balance sheet.
   They have increasing effect on the result of the business year, as they
   - inscrease the revenues
   - and decreasing the expenditures.




                                                 24
LIABILITIES:
D) Equity: the owner give their own money for the usage of the entrepreneurship, which can
be used without any time limitation.
   Parts of it:
    I. Subscribed capital
   II. Unpaid issued capital
  III. Capital reserves
  IV. Accumulated profit reserves
   V. Illiquid reserves
  VI. Evaluation reserves
 VII. Profit and loss according to the balance sheet


I. Subscribed capital: the capital given at the foundation of the company and share capital
   increase. The amount of it in case of limited liability companies and public companies is
   equal with the amount of the subscribed capital at the Registry Court – where the
   registration at the Registry Court is not compulsory – it is equal with the amount of
   capital, which is in the foundation document, contract of copartnery. The owner gets
   share and dividend on the basis of this. Based on the owners decision it can be more or
   less. (+)
II. Unpaid issued capital: that part from the subscribed capital, which didn’t release the
   owner to the company. (-)
III. Capital reserve: it is that amount of capital, which was paid in by the owners and
   members over the subscribed capital, which is not registered on the Registry Court. For
   example: premium, the conversional difference, when we would like to converse from Ft
   into foreign curreny or from foreign currency into Ft. (+)
IV. Accumulated profit reserves: the accumulated summation of the profit and loss
   according to the balance sheet of the entrepreneurship. (+,-)

V. Illiquid reserves: it is a detached amount of equity for determinated aims. The tying can
   come from the capital reserve, the accumulated profit reserve and the accessory cash-ins
   of the owners have to put in the illiquid reserves. (+)

VI. Evaluation reserves: it is created, when the entrepreneurship evaluates its invested assets
   on market value and the market value is higher, than the registartion value. This time the
   entrepreneurship upevaluates its fixed assets, it counts value correction. If it increases the


                                               25
    value of assets, it has to increase the value of liabilities with the same amount. If it make it
    inside the equity, we call it evaluation reserve.
    The evaluation reserve is the part of the equity just in that case, when the entrepreneurship
    shows out value correction at the fixed assets on the asset side. (+)

VII. Profit and loss accroding to the balance sheet: in the venture left part from the
produced result of the entrepreneurship – after having paid the dividend and the corporate tax.
(+,-)
    It can be counted from:

              All of the revenues
          -   All of the expenditures
              Result before taxation
          -   Obligatin to pay tax
              Result after taxation
          + Using the accumulated profit reserve for dividend and share
          -   Paid dividend and share
              Profit and loss according to the balance sheet


E) Specific reserves: for specific aims reserves the entrepreneurship capital from its before
taxation result.
        Specific reserve has to make for the following liabilities:
                    Guarantee liabilities, which are in orders,
                    Liabilities because of earlier pension and severance pay,
                    Environment protection liabilities, etc.,
        which costs we will expectedly or surely have on the basis of our infromation.

        We can create special reserves for our future liabilities (high and repeatable costs):
                    For the maintanance of the tangible assets,
                    For reorganisation costs,
                    For the costs connected to the environment protection, etc.,
        which can appear supposedly or surely, but the amount and length of them is not sure.


F) Liabilities: by the entrepreneurship known and legal paying obligations, which dates from
different contracts, orders.



                                                 26
Types of it:

       I. Deferred liabilities

    II. Long-term liabilities

    III. Short-term liabilities.



I. Deferred liabilities: those by the entrepreneurship borrowed special loans, for which the
    followings are typical:
-      The one, who gives the loan agrees that, if the venture goes bankrupt or becomes in
       liquadion, then the company can use the money for paying back its debts, an dthe
       company has to pay it back just after, when it paid for the other creditors. (On the last
       place there are the owners.)
-      The term of the loan is minimum 5 years. When the ending time is not determined, the
       loan cannot be withdrawn within 5 years.


II. Long-term liabilities: after 1 year expirated debts.
Remain to here:
-      Got long-term loans,
-      Investment and development credits, other long-term credits,
-      Liabilities from bond issues,
-      Other long-term liabilities, etc.


III.      Short     term    liabilities:   shorter    liabilities   and   debts   than   one   year.
Remain to here:
 Liabilities from goods carriage and servives, suppliers,
 Got loans for short-term,
 Short-term credits,
 Bill debts (the debtor makes the liability by bill debt),
 Tax obligations against the state budget (corporate tax, VAT, personal income tax, local
       taxes, employer affix, consumer tax, duty and duty costs, etc.),
 Liabilities against the employees (For example: wage obligations, other personal
       payments),
 Liabilities against the society insurance,


                                                     27
 Other short-term liabilities, etc.


G) Accrued and deferred liabilities: corrections, titles, which modifies the result in the
balance sheet.
   To the result of the business year they have reductional effect, as
   -    They reduce the revenues
   -    and grow the expenditures.


Tasks
1.1. Make the assets’ and liabilities’ classification! Put X to the right place!


  Name                                                      Assets            Liabilities
  Products
  Investment loans
  Vehicles
  Subsribed capital
  Check-out
  Bill debts
  Pedigree sires
  Trade debtors
  Trade payables
  Investments
  Materials
  Budgetary payment liabilities
  Immaterial products
 Other long-term loans
  Profit and loss according to the balance sheet
  Business or company value
  Unfinished production
  Obligation against the employees
  Goods
  Other long-term shares
  Stocks, which the owner would like to sell


                                                28
  Bank deposit
  Capital reserves
  Packages
  Obligation from bond issues




1.2. Make the following assets’ and liabilities’ classification! Put X to the right column!


Name                                                Assets                  Liabilities
                                         Fixed         Current     Equity        Liabilities
Given loans
Immovables
Property value rights
State bonds
Unfinished products
Check-out
Jegyzett, de még be nem fiz. tőke
Investment credits
Goods
Long-term bank deposits
Tax obligations
Technical machines, equipments,
vehicles
Capital reserves
Packages
Immaterial products
Demands against the customers
Eredménytartalék
Investments
Profit and loss according to the
balance sheet
Bill of exchange obligation
Manufactured products


                                               29
Animals
Subscribed capital
Suppliers
Materials
Short-term loans
Obligations against the founder


1.3. The following assets and liabilities classify on the basis of, which remain to which row of
   the balance sheet.
    (For example: factory: A./II./1)


   The annual profit of the entrepreneurship:
   Production equipments:
   Bought stock in order to sell:
   Unfinished building:
   Obligation from selling:
   Product under preparation:
   Got bill of exchange against obligation:
   On the registry court subscribed capital:
   Inventory building:
   Predetermination:
   Accumulated profit reserve:
   9 months long bank credit:
   Computer not for production aim:
   Providing loan to another entrepreneurship for more than one year period of time:
   Got bill of exchange against obligation:


1.4. Which titles remains to the liabilities? Give the right answers!
    a.) Demand against the employees,
    b.) suppliers,
    c.) junior liabilities,
    d.) customers,
    e.) social insurance liabilities,


                                                30
    f.) other demands,
    g.) short-term loans.


1.5. The main elements of the balance sheet: Assets, Equity, Liabilities. Give the right
    answer!
    a.) Assets=Liabilities-Equity.
    b.) Assets+Liabilities=Equity.
    c.) Assets+Equity=Liabilities.
    d.) Assets=Liabilities+Equity.


1.6. If we have the assets and the liabilities, how big amount of money should the company
    pay as obligation and how much money will get the company onto its bank account?


    Obligation of bill of exchange 450 000 Ft, bill debt 800 000 Ft, tax obligation 400 000 Ft,
    bank account 8 000 000 Ft, the value of manufactured products 5 000 000 Ft, demand
    against the customers 1 500 000 Ft, obligation against the suppliers 900 000 Ft.
    The opening value of the bank account:……………………………..
    The incoming amount of money to the bank account:…………………………
    Amount to be transferred:………………………………………………….
    The closing amount of the bank account:………………………………




1.7. We show the balance sheet of 3 entrepreneurships in the following. (The datas are in
thousand Ft)




Assets                           Balance sheet …… 31 December                        Liabilities


                      A              B            C                         A        B        C


A. Invested assets.       ………..          20000     ……….       D. Equity    30000     35000    25000
  Immovables          20000       ………..          10000       Subsribed capital 28000 ……… ……..
   Machine     10000          8000        ……..             Profit and loss according to the balance sheet
B. Current assets         ……..       ………          34000       Result      ……..     1000      1500



                                                      31
  Inventories           ………          20000       18000 E. Specific reserves           1000       1500     2500
 Demands              4000        4000       10000        F. Liabilities. ……..       …….. ……..
 Stocks          3000        5000         4000              Long-term liabilities
 Financial assets         2000        …….         ……..             15000      2000       …….
                                                                Short-term liabilities
                                                                . ……..       ……… 15000
Total            50000       50000        50000        Total        50000        50000 50000


Task:
 1. Count out the missing amounts!
 2. Compare the mix of assets and liabilities of the 3 entrepreneurships!




1.8. Complete the balance sheet!


Datas in 1000 Ft                         Balance sheet, ……... 31 December                      datas in 1000 Ft
                         Assets                                                  Liabilities
A.Fixed assets                                   50 000 D.Equity                                    ……………
I.……………….. assets                                 3 000 I. Subscribed capital                            20 000
II. Tangible assets                              39 000 … Profit accumulating reserve                    28 000
III.………………………..                           …………… ….Profit and loss according to ...                  ……………
B.Current assets                          …………… F. Liabilities                                           45 000
I. Inventories                                   10 000 I.…………………………                                      3 000
II. …………………..                                     8 000 II.……..…….. liabilities                          20 000
III.…………………..                            ……………. III.……………. liabilities
IV. Financial assets                             15 000
Total assets:                                    90 000 Total liabilities:                          ……………


I/1.1.1.c) The inventory
To the closing of the business year of the books, the making of the report, the confirming of
the titles of the balance sheet we have to make an inventory, which contains the assets and
liabilities in the right measure and value in a detalied, controllable way. If the
entrepreneurship doesn’t have any measurable registration, then the inventory has to be
passed the inventory-composition.



                                                       32
The inventory: it is a statement of affairs, which contains the assets and liabilities or one of
its groups’ measure and value in a detailed way for a determined date.
The inventory activity: the inventory is an activity, in which the entrepreneur counts the real
measure of the assets and liablilies by measure them and if they are not measureable, then
with reconciliation.
It can be a method for doing inventory:
    Measure record, then evaluation (measurable data x price = value): it means the real
       counting, measuring. For example we can make an inventory like this in case of the
       stocks in hand (materials, goods, products, animals), the fixed assets and the stocks,
       etc.
    Reconciliation: it means the controlling of the datas and comparing them with the
       other datas, which are in different documents.
       For example: we can make inventory like this
       ~ the balance datas of the bank accounts => reconciliation with the bank account
       report
        ~ the datas of the demands and the trade payables => by reconciliation with the
       business partner.
The accountancy law makes compulsory just the preparing inventory for the
entrepreneur, but the inventory activity not. This means, that the inventory can be made
without any doing inventory activity.
If there is any difference between the two datas, we can talk about inventory difference.
The inventory difference has two different type:
- surplus, if the measure and value data based on the inventory > then the measure and value
based on the book value
- lack, if the measure and value data based on the inventory < then the measure and value
based on the book value
This time the datas from the registrations are modified on the basis of inventorial datas.


The inventorial regulation are made by the entrepreneurships in order to make the inventory.
This basicly determines the method of inventory, the rules of inventory evaluation, the
method of the offset of inventorial differences, the recording of the inventorial datas.




                                               33
Moreover the inventorial schedule has to be made, which determines
- the ones, who make the inventory, the inventorial controllers, the people, who are
responsible for inventory
- the inventorial places
- the beginning and the ending date of the inventory, etc.


The types of the inventory:
    ~ On the basis of its content: partly or entire inventory
    ~ On the basis of its aim: fortune determination and liquidation inventory
    ~ On the basis of date: opening, closing and interim inventory.


The inventory is the basic document of the balance sheet. The datas from the balance sheet
should be supported by inventory.
The comparison of the inventory and the balance sheet:
Same things:
- Both of them are statement of affairs and contain the assets and liabilities of the
entrepreneur.
- They are prepared for the balance date.
- The responsible people test it by their signiture.
Differences:
- The balance sheet is always holistic, at the inventory there are also partly inventories, which
contain only one asset or liability group (for example material inventory, inventory of fixed
assets, etc.)
- The balance sheet is contracted, the inventory is detailed.
- The balance sheet contains the fortune elements in a particular form and order, the form and
order of the inventory are free.
- The balance sheet contains only contracted value datas, the inventory contains measure and
value datas also. (The inventory contains the exact value of the fortune elements.)


                     Inventory                                       Balance sheet
                      Both of the documents are prepared for the balance date.
                Both of them shows the assets and liabilities of the entrepreneurship.
                       The responsible people has to test it by their signiture.



                                                  34
    It makes a report based on the quality, the It makes report in value
                    measurement and the value
                                 Detailed report Contracted report
   Under each other it contains the assets and It contains the assets and liabilities in a two
                                       liabilities side way in a contracted form




Tasks
2. 1. Choose the right answer! (Only one answer is possible.)
      The same in the inventory and the balance sheet is:
              a.) Both of them are made in contracted form,
              b.) Both of them are holistic,
              c.) Both of them are made for balance date,
              d.) Both of them contain measurable datas.


        The difference between the inventory and balance sheet:
              a.) both of them are made in contracted from,
              b.) both of them are made for balance date,
              c.) both of them are signed by responsible people,
              d.) both of them are statement of affairs.


2.2. From the following statements determine, which true or false is and tell it exactly why!
a.) The balance sheet shows only one fortune element, the inventory is holistic.
T-F




b.) The inventory record can be made in measure and in value or in both of them.
T-F




c.) The datas are in Ft in the balance sheet and the inventory.
T-F




                                                35
I/1.1.2. The operating income statement


Definition: it is an accountancy document, which serves the deduction of the profit and loss
according to the balance sheet of the entrepreneurship.
The aim of the operating income statement is to determine at the entrepreneurship remained
profit and loss according to the balance sheet, and determine the factors, which have effect on
the result, make difference between the differrent result categories.
The detailed aim of the operating income statement is the following:
-   To show the different activities effect for the results, so the result with its causing factors,
-   To show that how we can divide the result between the economic person, the owners of
    the entrepreneurship (founders) and the state budget, so contain the deduction of the profit
    and loss according to the balance sheet,
-   To lie down the basics of the future economical decisions, firstly see the profitability view
    and
-   On this basis it has to help to create a reliable and real picture about the entrepreneur, to
    show the real financial case of the entrepreneur.


The content of it:
    1. Revenues:: collecting definition. Definition, with connects to the selling in the
          accountancy. It is not the same with the bank and cash revenues.
    Parts of it:
    a./ Turnover: those bought and on its own made inventories, which are sold by the
entrepreneurship during the year and the completed services value. (net turnover: can be also
inner or export revenue)
    b./ Other revenues: it is created by the continous activity, it is not the part of the turnover.
For example: the value of the sold fixed assets, the value of the immaterial products, penalty,
wrote back loss in value, etc.
    c./ The revenues of the financial operations: the realized revenue after the invested
financial assets and stocks of the entrepreneurship. For example: dividend, share, interest,
profit-taking, etc.
    d./ Extraordinary revenues: they are out of the ordinary business operation of the
entrepreneurship, they are not in connection with the ordinary entrepreneurial activity. For



                                                 36
example: got support for development, left demands, got assets without paying for them
anything, etc.


   2. Expenditures: collective definition.
   Parts of it:
   a./ Cost: the value of the live (workforce) and not live work (material, energy, the value of
services, amortization) in money. It connects to the production and service providing process.
Expenditure: it can be bank, inventory or checkout expenditure.
   Grouping of the costs:
     ~ according to the cost type:
            Material type: the value of the bought and used materials, consumed services,
                  other services,
            Staff costs: the salary of the employees, the affix and the other staff costs,
            Depreciation expense: the depreciation of the immaterial products and fixed
                  assets on the basis of the plan and the for not more than, 100.000Ft bought
                  assets expensed depreciation in one amount.
     ~ according to the way of liquadition:
            Directly liquidable costs: we can know exactly, to which product or service
                  belongs the cost, so we know, which wears the costs (material costs, staff costs
                  and affixes, etc.),
            Indirectly liquidable costs: we know just the place, the cost place, and don’t
                  know, to which product belongs the cost (factory and company costs).
     ~ according to the changing of the volumen of production:
            Fix costs: they are independent from the volumen of the production, for
                  example: insurance fee, service basic fee, rent fee,
            Variable costs: they change depend on the production in a linear, progressive
                  or degressive way, for example: material cost, staff cost.


   b./ Other expenditures: it is created during the everyday activity, it is not connected to the
basic activity of the company. For example: sold immaterial products, the value of the fixed
assets, depreciation expense, paid fee, consumer tax, etc.
   c./ The expenditures of the financial operations: paid interest after the invested financial
assets of the company, the price loss, value loss, etc.



                                                  37
   d./ Extraordinary costs: they don’t belong to the ordinary business activity of the
company. For example: given assets without paying, given support for development, etc.


The result of the business year of the entrepreneurship = all revenues – all expenditures
The result can be: ~ positive (+), gain R>E
                    ~ negative (-), loss R<E


Typical for the operating income statement:
   -   It shows the income production ability of the company,
   -   It is for a given period of time,
   -   It is made in a contracted form,
   -   It is made in thousand or million Ft,
   -   It is built from 3 columns (similar to the balance sheet)
   -   It has 4 different type, from one of these is compulsory to make.
Categories of it:
   -   Main group: categories with big letters,
   -   Group: categories with Roman numbers,
   -   Title rows: categories with Arabien numbers.
The operating income statement has 4 different forms:
Aaccording to the preparing method:
   -   By overall costs process made: gross view, they take away from all of the revenues
       all of the expenditures. (We have to consider also the not realized revenue.)
   -   By traffic costs process made: net view, it considers just the revenues and
       expenditures, which are connected to the sales.
Within both forms we can find two different types:
   -   „A” type, it’s in a step by step form, so the different result categories are under each
       other, firstly the revenues and then the expenditures.
   -   „B” type, which has similar form to the balance sheet, so the different result
       categories are under each other, on the left side we can find the expenditures and on
       the right side the revenues.




                                               38
Overall costs process „A”                                 Traffic costs process „A”
 I. + Net revenue of selling                               I. + Net revenue of selling
II. +-Activated own fulfilments                           II. – Direct cost of selling
III. + Other revenues                                     III. = Gross result of selling
IV. – Material type expenditures                          IV. - Ért. közvetett költsége
V. – Staff type expenditures                              V. + Egyéb bevételek
VI. – Depreciation expense                                VI. – Other expenditures
VII. – Other expenditures                                                                  .
                        = „A” Operating and business result
                        VIII.+ Revenues of financial operations
                         IX.- Expenditures of financial operations
                        „B”= The result of the financial operations
                        „C”= Ordinary entrepreneurial result
                        X. + Extraordinary revenues
                        XI. – Extraordinary expenditures
                        „D” = Extraordinary result
                        „E” = Result before taxation
                        XII. – Tax paying liability
                        „F” = After tax profit
                        22. + Using the accumulated profit reserve for dividend
                        23. – Approved dividend, share
                        „G” = PROFIT AND LOSS ACCORDING TO THE BALANCE
SHEET


The connection between the costs of the two operating income statements:


    Overall costs process                             =                   Traffic costs process
   The cost of the period                                                Direct costs of selling
      Cost types
             +-                                  =                                   +
 Activated own fulfilments                                              Indirect costs of selling


The content of the result categories:


                                                 39
„A” Operating and business result:            the difference between the revenues of the
entrepreneurship and the expenditures of it, if we see just the selling activity of the company
and the difference between the connected revenues and expenditures.
„B” Result of the financial operations:          the result of the financial activity of the
entrepreneurship, the difference between the revenues and expenditures of the financial
operations.
„C” Ordinary entrepreneurial result: the summation of the operating and business result and
the result of the financial operations.
„D” Extraordinary result: it is the result, which is out of the entrepreneurship ordinary
activity, it hasn’t got direct connection to the production and service providing activity. It is
the difference between the extraordinary revenues and expenditures.
E” Result before taxation: the summation of the ordinary entrepreneurial result and the
extraordinary result. At the counting of the corporate tax we have to correct by the increasing
and decreasing titles of the tax base.
„F” Tax paid result: the result before taxation decreased by the tax paying obligation.
„G” Profit and loss according to the balance sheet: the result after taxation, with which the
entrepreneur will increase the equity in case of profit and decrease in case of loss.
The net revenue of selling: the offset of the sold inventories and the billed services without
value-added tax.
The value of activated own fulfilments:
   -    Change in self-manufactured stocks: the difference between the opening and closing
        stocks.
   -    Own work capitalized: in the own entrepreneurship made, between the assets stock put
        own fulfilments’ value.
look: 3rd., 4th. appendix


Tasks
3.1. Make the overall costs process operating income statement’s “A” variant from the
following datas!
   The datas are in thousand Ft.


   The revenue of the inner selling                                  120.000
   Extraordinary expenditures                                            150
   Material costs                                                     40.000


                                               40
   Other got interests                                              600
   The value of other services                                    2.000
   Making surplus reserve                                           400
   Buying value of the sold goods                                 9.000
   Taxes                                                          1.000
   Interests, which the company has to pay                         700
   Extraordinary revenues                                           900
   Staff costs                                                  30.000
   Other revenues                                                11.000
   The book value of the sold immaterial products and fixes assets 8.000
   Affixes                                                      13.750
   Change in self-manufactured stocks (-)                         2.000
   Depreciation expense                                          18.000
   Tax base increasing amount                                     1.500
   Dividend                                                       3.000
   The measure of corporate tax                                    16%




                         Operating income statement 20… December 31
Name                                                               Datas in thousand Ft
 I. The net revenue of selling
II. The value of activated own fulfilments
III. Other revenues
IV. Material type expenditures
V. Staff type expenditures
VI. Depreciation expense
VII. Other expenditures
A. Operating and business result
VIII. Revenues of financial operations
IX. Expenditures of financial operations
B. Result of financial operations
C. Ordinary entrepreneurial result



                                             41
X. Extraordinary revenues
XI. Extraordinary expenditures
D. Extraordinary result
E. Result before taxation
XII: Tax paying obligation
F. Tax-paid result
23. Dividend
G. Profit and loss according to the balance sheet


3.2. From the following statements choose the true and the false ones. Always justify the false
statements!

   a.) The operating income statement shows the entrepreneurial result of the company for
        the balance date of the report.
   T - F




   b.) The cost of the advertising and the participation on the exhibitions belong to the direct
        costs of the selling.
   T - F




   c.) By the traffic costs process made operating income statement has gross view, because
        it contains the direct and indirect costs of the selling also.
   T - F




   d.) We can get the result of the entrepreneurship, if we make the difference between the
        revenues and the expenditures.
   T - F



   e.) The “A” type operating income statement according to the accountancy law has a step
        by step form.



                                                 42
       T -F




       f.) The value of the sold indirect services is the part of the costs of the direct costs of
          selling.
       T-F




       g.)The operating income statement has two different types.
    T–F




3.3.     Choose the right answer! (Only one answer is possible.)
       1./ Between the material type expenditures we have to show out:
               a) The affixes,
               b) The value of the used services,
               c) The value of the missing material inventory,
               d) The depreciation of the fixed assets,
       2./From the following ones which is not axpenditure?
               a) The book value of the sold fixed assets,
               b) The amount of the demands, which are uncollectable,
               c) Employer affix,
               d) The depreciation of the fixed assets, which is more than in the plan.
       3./ The revenue of the financial operations:
               a.) got default interest,
               b.) in the foundation document determined value of the apport given assets,
               c.) the depreciation of the sharesrészesedések értékvesztése,
               d.) non of them.




3.4. Determine the definition and the typical things of the operating income statement!




                                                 43
3.5. Determine the definition of the costs and put them into groups according to cost types!




3.6. Make pairs between the result categories and events!
   a.) The revenue of selling the fixed asset
   b.) The revenue of selling the inventory
   c.) Got interest from bank
   d.) The value of the inventory at selling
   e.) The paid amount of fees and default interests
   f.) The book value of to the apport given assets
   g.) Authority fees
   h.) The value of as apport brought assets according to the corporate contract
   i.) Paid interest after the credit
   j.) Paid wage and other obligations to the employees
   k.) The book value of selling the fixed assets
   l.) The value of material buying from the supplier
   m.) The book value of the rejected assets
   n.) Got compensation from the insurance company


            1. Revenue                         ……………………
            2. Other revenues                  ……………………
            3. Revenues of the financial operations……………
            4. Extraordinary revenues           …………………..
            5. Other expenditures               …………………..
            6. Expenditures of financial operations …………..


                                                44
             7. Extraordinary expenditures           ………………..
             8. Costs                                ………………..
             9. Doesn’t have any effect on the result...................


3.7. Make the operating income statement of the entrepreneurship by the overall costs
process!
   You know the following datas about the business year of the company.
   The 40% of the costs are indirect costs.


           Name                                                            Datas in thousand Ft
           The net revenue of the selling                                                65.000
           Costs:
              - material type expenditures                                               25.000
              - staff type expenditures                                                  10.000
              - depreciation expense                                                      5.000
           Revenues connected to demages                                                  3.000
           Paid default interests                                                         1.500
           The change in self-manufactured stocks                                           200
           Paid interests                                                                 1.200
           Got interests                                                                  1.500
           Dividend                                                                       5.000
           The measure of the corporate tax: 16%


           Determine the direct cost of the selling!




                               Operating income statement 20… December 31
Name                                                                           Datas in thousand Ft
 I. The net revenue of the selling
II. The value of the activated own fulfilments
III. Other revenues
IV. Material type expenditures
V. Staff type expenditures



                                                   45
VI. Depreciation expense
VII. Other expenditures
A. Operating and business result
VIII. The revenues of the financial operations
IX. The expenditures of the financial operations
B. The result of the financial operations
C. Ordinary entrepreneurial result
X. Extraordinary revenues
XI. Extraordinary expenditures
D. Extraordinary result
E. Result before taxation
XII: Tax paying obligation
F. Tax-paid result
23. Dividend
G. Profit and loss according to the balance sheet




3.8. Prepare the “A” type by overall costs process made operating income statement!
           We know the following datas of the business year of the company:
           The 45% of the costs are indirect costs.


           Name                                                 Datas in thousand Ft
           The net revenue of the selling                                      40.000
           Costs:
               - material type expenditures                                    15.000
               - staff type expenditures                                        5.000
               - depreciation expense                                           5.000
           Revenues connected to demages                                        2.000
           Paid default interests                                               1.500
           The change in self-manufactured stocks                                 100
           Paid interests                                                       2.000
           Got interests                                                        1.500
           Dividend                                                             2.000



                                                 46
           The measure of the corporate tax: 16%


          Determine the direct cost of the selling!




                             Operating income statement 20… December 31
Name                                                             Datas in thousand Ft
 I. The net revenue of the selling
II. The value of the activated own fulfilments
III. Other revenues
IV. Material type expenditures
V. Staff type expenditures
VI. Depreciation expense
VII. Other expenditures
A. Operating and business result
VIII. The revenues of the financial operations
IX. The expenditures of the financial operations
B. The result of the financial operations
C. Ordinary entrepreneurial result
X. Extraordinary revenues
XI. Extraordinary expenditures
D. Extraordinary result
E. Result before taxation
XII: Tax paying obligation
F. Tax-paid result
23. Dividend
G. Profit and loss according to the balance sheet




                                                 47
I/1.1.3 Appendix


The aim of it: to go into more details in the items, which are in the balance sheet and the
operating income statement in order to secure to the outside users the reliable and real datas
about the financial and property case of the entrepreneurship. It contains text and numbers
also.
The parts of it:
    1. Average appendix: it shows the determinated elements of the accountancy policy and
        the changings of them, it shows the places and causes of the differences from the
        accountancy basic principles.
    2. Special appendix: it shows the place and the cause of the difference from the basic
        principles, the cause of them for the fortune, the effect to the result, the financial and
        property case.
        It shows detailed the changings
        a.) in the balance sheet
        b.) and in the operating income statement.
    3. Information giving appendix: the market position of the company, the investment and
        the structure changing plans can be showed in it. (It hasn’t got any compulsory form.)
The appendix with the balance sheet and the operating income statement within 150 days after
the business year have to deposit at the Registry Court. We don’t have to publish the whole
document or a part of it, if the auditor thinks, that the datas of the balance sheet and the
operating income statement are enough to award the financial, property and fortune case of
the entrepreneur.


We have to make the cash flow report as the part of the appendix, which aim is to follow the
cash flows of the entrepreneurship. The entrepreneurships make their own circulation of
money plan in every year, which put the planned revenues and expenditures contrast and
make contrast between its expenditures, when we make this, we just have to use the real cash
flows of that observed period of time. The traffic view of the circulation of money plan is the
cash flow. This is a statement, with which we can determine the changes in our money within
a period of time. We can say from this, with how much and why the money supply changed.
The 7th appendix of the 2000 C law determines the detailed form of the cash flow statement.




                                                48
I/1.1.4. Business report


The aim of it: to give a reliable picture by showing the financial, property and fortune case of
the entrepreneurship, the potential risks and uncertain things, the past facts and the waited
future datas with evaluation of the datas of the report.
It has to contain a detailed analysis about the development of the entrepreneurship, the
fulfilment of it and its case, which is in correspondence with the size and complexity of the
company.
It has to contain moreover all of the financial and where it is necessary non-financial
fulfilment indicators, which are necessary to understand the development and fulfilment of
the company and essential in the view of the entrepreneurship.




                                                49
II. Accountancy warrants


Some differences occur during the entrepreneurial activities in the financial, property and
fortune case of the entrepreneurship. The economical events create these chanings.
The definition of the economical events (economical operations): all of those events,
happenings, which cause changes in the financial, property, fortune case of the
entrepreneurship and these changes are:
- Measurable => it can be signified in measure and value datas
- it can be proved by warrants, that they really happened.


Definition: All of the inside and outside documents, which are made for the aim of
accountancy registration of the econmical events. It fixes the changes in the assets and
liabilities of the entrepreneurship. The basic document of the book-keeping, it serves the
support of the book-keeping records. All of the accounting themes has to have a warrant
basis. The warrant is a document, which proves that the economical event really happened,
the measure and the quality of it. The warrants: report, bill, registration, register, certification..


Grouping of the warrants:
    a.) According to the date of their issue:
               primer warrants: it is made in the same time with the economical events, at
                the place of the economical operation.
             sekunder warrants: they are made, when we processed and totalized the primer
                warrants.
    b.) According to the way of preparing:
             With handwriting, typewriter,
             With automatic data recording.
    c.) According to their originity:
             Outside warrants,
             Inside warrants.
    d.) According to the content of the fixed events:
             Fixing the changes of the fixed assets
             Documenting the inventory changing


                                                 50
            Registration of the movements of the checkout
            Registration of the movements of the bank accounts.
   e.) According to the way of handling them:
            Warrants, which belong under strict accounting obligation: those documents,
               which connect to handling money and other by law determined economical
               event. Moreover all of those documents, for which has to pay more than the
               value of the document or the proper offset to the denomination of the
               document or if it is used by incomponent people, it can give a cause for
               imposition. It is the obligation of the publisher to determine where to belong
               the warrant. The supplies (when, with which number they warrants bought)
               and the expenditures (when, for who, with which number they warrants gave
               out) have to register. The responsible people are responsible for the usage of
               the strict accounting obligation warrants. According to the number all of the
               documents have to be found, the ruined documents also have to preserve. Like
               for example: bills, checkout documents, receipts, vouchers, etc.
                look: 6th,7th , 8th, 9th appendix
            Warrants, which don’t belong under the strict accounting obligation: which
               the entrepreneur qualifies for this.The entrepreneur has to document these
               warrants in an internal regulation
               look: 10th appendix


According to the law regular is that document, which is for the given economical event:
     - contains the real and entire datas,
     - meets the average formal and content requirements of the warranst,
     - and which – in case of fault – is corrected in a regular way.


The requirements of the warrants:
           a.) Content requirements:
- The exact write-off or encoding of the content of the economical events in order to every
stakeholders understand the same change on it.
- The record of the measure, quality and value datas of the economical event in order to know,
that the economical event how big change caused.
- Giving the name to the entrepreneurship, sign the place of the economical event.



                                                    51
- Fixing the date of the economical event.
- The signiture of the people, who take part in the completing of the economical event. They
prove, that the economical event really happened.


               b.) Formal requirements:
- The name and the number of the warrant.
- The observance of the correcting rules.
- Making it without any delay, the primer warrant has to be ready in the same time with the
changing.
- In case of secunder warrants the warrants, which serves the basis of the summation, and the
period of time, for which the summation is valid.
- In case of technical or optical way made warrants: the identity number of the processing
program, the identity number of the datas, the code report of the identification, securing not to
delay.
- Securing that the recorded datas can be well read until the compolsory preserving deadline.


The vouchert principle, the vouchert discipline:
Voucher principle: all of the accountancy themes has to have a warrant basis.
- about the economical event, which the changes the stock and the composition of the assets
and liabilities we have to create a voucher,
- the datas of the voucher have to record in the book-keeping registrations.
- in the book-keeping registrations just on the basis of regularly made vouchers we can record
datas.
- The principle of reality: the registrations has to provide the real mirror of the economical
events.
Voucher discipline: the puncuality, the solidity of the accountancy and there cannot be any
delay in it.




Accountancy deadlines:
a.) In the datas of the vouchers of the movements of financial assets:
               - at the entrepreneurship, which makes annual report and simplified annual
               report: The datas of the checkout vouchers in the same time with the money



                                               52
           movement, at the time of arriving the datas of the bank document have to be
           accounted.
           - at the entrepreneurships, which make simplified annual report:
                 The datas of the checkout vouchers in the same time with the money
                 movement, at the arriving of the datas of the bank documents have to be
                 recorded. The themes, which connecta to the other financial assets, have to
                 record until the 15th of the month.
b.)At the datas of other vouchers: after the economical event happened, but at least the closing
of the book-keeping it has to be accounted.


The way of the vouchers:
Remittance, filling, issue: the entrepreneur orders the economical event, the filling of the
   voucher, which are made by the commissioned person.
Controlling: the controll of the content and the formal requirements of vouchers.
Processing: grouping of the vouchers, assignment of the receipt, representation of the
   references on the vouchers, making the encodings. These are the tasks of the analitical
   accountant.
Preserving: the place of it is the filing-cabinet, from where the vouchers have to be quickly
   looked back. About the preserving place has to take in a receipt into the place of the
   specified voucher. The vouchers can be preserved in micro film or in any other IT data
   recorder. The entrepreneur has to preserve the report, the trial balance, the ledger account,
   the inventory until 10 years and the other vouchers until 5 years.


The correction and invalidation of the vouchers:
The correction rules of the vouchers:
The vouchers can be put into two groups in the basis of correction:
 - Not correctable vouchers: a new voucher has to be filled in case of default vouchers.
 - Correctable vouchers: in case of these vouchers the correction has to be done with using
the correction rules.
The correction in this way can only be made in internal vouchers. The discovered faults on
the external vouchers can only be corrected by the certifier.




                                                 53
Process:
    Correction: drag the false data or text the way that it remains readable, and write the
       correct data above the corrected part. Mark the correction with signature and date.
Uncorrectable: bank certificate, sales slip, cash cheque, slip from other contractor
    Invalidation: not corrigible with correction on the certificate. All copies of the
       certificate must be invalidated, and new certificate must be filled in. The certificates
       must be crossed out diagonally, and the fact of invalidation must be written there
       prominently, e.g.: „ERROR”. This must be kept!


External vouchers can be corrected only by its issuer:
- issue and send new invoice to its customer
- issue and send an invoice of correction to its customer.




                                               54
III. The evaluation

Assessment of the value of assets.


Unit-price: amount of money, in which a unit product or service is denominated.


Sale price, market unit-price: amount of money, which is given for a unit of product or a
service in the market. This is the price which is recognized by the market.


Acquisition price, acquisition cost: amount of money, with which a given product or service
can be purchased in the market, i.e. those expenditures which are connected to the asset
individually, those that arise in the sake of the acquisition or creation, transportation of the
asset until its installation and storage.
+ invoice price without VAT
+ premium
- concession
+ transportation cost
+ intermediary costs
+ commission
+ customs duty
+ acquisition related taxes
+ installation costs
+ set-in costs
+ authority charges
Value Added Tax is not part of the acquisition price


a.) fixed assets: those expenditures which evolve until installation. Items enhancing vale are:
loans for investments, interest on loans and insurance fee until installation. Economic events
related to current assets (costs related to expansion, change in function, increase o f lifetime
and recondition of original condition) are value adding initial costs.




                                               55
b.) inventories: those expenditures which evolve until delivery to warehouse. The value
according to contract of apported assets contributed to a foundation of a company.


Historical cost: the value, in which the assets are recorded to the registers initially; value
calculated by acquisition costs.


Book value: the value, in which the assets are recorded in the registers. Amortization and
depreciation are deducted from the acquisition price.


Prime cost: the money, that the production of one unit of product or service cost for the
manufacturer. Those expenditures that are directly related to the product itself, and evolve
during the production and installation of the asset.


At fixed assets: upgraded with direct expenditures related to expansion, reorganization,
lifetime-increase and refurbishment works, and related interest on loans and insurance fees,
until installation.


The prime cost is the direct cost of the product:
- remittable direct costs at emergence
- costs determined by proper features and indicators can be shared between the products
Not direct costs of production:
- sales expenditures
- administrative and other costs, which are not related directly to the production


Companies can use appreciation in case of some elements of durable assets. These assets are:
intangibles, immaterial goods, real estate, technical equipments, vehicles, other equipments,
investments in associates, given loans, long-term bank deposits (securities).


The amount of the appreciation is the value adjustment. In case of appreciation, the assets are
evaluated in their market price, but the above listed assets are registered in their original cost
in the balance sheets. The amount of appreciation has to be exhibited by asset classes in the
line of balance of value adjustment. The amount of value adjustment is the difference between
the past and present, the reserve inherent in the company.



                                               56
The value appreciation is evaluation reserve on the liabilities side of the balance sheet. The
amount of it is equal to the amount of value adjustment of fixed assets


In the earnings statement: income is to be evaluated in actual daily prices, expenditures are
evaluated by their past prices. Therefore inflation gain is also included in the returns of the
company. Therefore, after this excess profit, corporate tax has to be paid by the company




                                              57
IV. Economic activities, economic events




Definition: those measurable events which change the assets and liabilities of a company and
can be expressed in value, and verifiable with documents.


A. General economic events: affects only the wealth position of the company, but not the
income position. The changes affect only the balance sheet.
       Asset turnover: the increase of the value of one group of asset is equal to the decrease
       of another group of assets. The different assets in the balance sheet are rearranged, but
       the sum of their values remains constant. (E + X - X = F)
       Liability turnover: the increase of the value of one group of liabilities is equal to the
       decrease of another group of liabilities. The different liabilities in the balance sheet are
       rearranged, but the sum of their values remains constant. (E = F + X – X)
       Increase of capital: the increase of the value of one group of assets is equal to the
       increase of another group of liabilities. Net assets increase with the same amount as
       the net liabilities. Disposable wealth of the company increases. (E + X = F + X)
       Decrease of capital: the decrease of the value of one group of assets is equal to the
       decrease of another group of liabilities. Net assets decrease with the same amount as
       the net liabilities. Disposable wealth of the company narrows. (E - X = F – X)


B. Complex economic events: influences both the wealth and income position of the
company, and affects both the balance sheet and earnings report.




                                               58
Examples to basic economic events:


Opening balance-sheet of a company on 1st January, ………….              (Data in HUF)
Assets                             Balance-sheet,                                Liabilities
A.)Long-term Assets           140 000 D) Equity                                   235 000
   I. Intangibles              10 000      I. Issued capital                      200 000
  II. Tangible assets         100 000    III. Capital reserves                     10 000
 III. Financial assets         30 000    IV. Accumulated profit reserve            20 000
B) Current Assets             110 000   VII. Profit according to balance-sheet     +5 000
   I. Inventories               50 000 E) Special reserves                         12 000
  II. Receivables              40 000 F) Liabilities                               19 000
 III. Securities                 5 000   II. Long-term liabilities                 11 000
 IV. Cash                      15 000   III. Short-term liabilities                 8 000
C) Accrued assets               20 000  G) Deferred liabilities                     4 000
TOTAL ASSETS:                  270 000 TOTAL LIABILITIES:                          270 000



First-type economic event: asset turnover
The company purchased materials for the value of 1 000 tHUF in cash.
The event affected only the assets part of the balance sheet. Total sum of assets remained
unchanged, only the structure of the assets changed.


Balance-sheet of the company after the economic event:
Opening balance-sheet of a company on 1st January, ………….              (Data in 1000 HUF)
Assets                             Balance-sheet,                                Liabilities
A.)Long-term Assets           140 000 D) Equity                                   235 000
   I. Intangibles              10 000      I. Issued capital                      200 000
  II. Tangible assets         100 000    III. Capital reserves                     10 000
 III. Financial assets         30 000    IV. Accumulated profit reserve            20 000
B) Current Assets             110 000   VII. Profit according to balance-sheet      +5 000
   I. Inventories (+ 1.000)    51 000   E) Special reserves                        12 000
  II. Receivables              40 000 F) Liabilities                               19 000
 III. Securities                 5 000   II. Long-term liabilities                 11 000
 IV. Cash (- 1.000)             14 000  III. Short-term liabilities                  8 000
C) Accrued assets               20 000   G) Deferred liabilities.                    4 000
TOTAL ASSETS:                  270 000 TOTAL LIABILITIES:                          270 000




                                             59
Second-type economic event: liabilities turnover
The company transferred its profit onto the accumulated profit reserve. This economic event
affected only the liabilities side of the balance sheet. The total sum of liabilities did not
change, only the composition of the liabilities.


Opening balance-sheet of a company on 1st January, ………….                (Data in 1000 HUF)
Assets                              Balance-sheet,                                Liabilities
A.)Long-term Assets           140 000 D) Equity                                     235 000
   I. Intangibles              10 000      I. Issued capital                        200 000
  II. Tangible assets         100 000    III. Capital reserves                       10 000
 III. Financial assets         30 000    IV. Accum. profit reserve (+5.000)          25 000
B) Current Assets             110 000   VII. Profit (-5.000)                              0
   I. Inventories               51 000 E) Special reserves                           12 000
  II. Receivables              40 000 F) Liabilities                                 19 000
 III. Securities                 5 000   II. Long-term liabilities                   11 000
 IV. Cash                       14 000  III. Short-term liabilities                   8 000
C) Accrued assets               20 000   G) Deferred liabilities.                     4 000
TOTAL ASSETS:                  270 000 TOTAL LIABILITIES:                            270 000


Third-type economic events: capital raise to the corporation
The company borrowed short-term working capital loan from its account-holding bank. The
company already got its loan of 4000 eFt, which was credited to its current account (deposit
account for settling of accounts). The event affected both the assets and liabilities side of the
balance sheet. While both the total value of assets and liabilities increased, the balance-sheet
total also increased.


Balance-sheet of the company after the economic event:
Opening balance-sheet of a company on 1st January, ………….                (Data in 1000 HUF)
Assets                              Balance-sheet,                                Liabilities
A.)Long-term Assets           140 000 D) Equity                                     235 000
   I. Intangibles              10 000    I. Issued capital                          200 000
  II. Tangible assets         100 000  III. Capital reserves                         10 000
 III. Financial assets         30 000  IV. Accum. profit reserve                     25 000
B) Current Assets             114 000  VII. Profit                                        0
   I. Inventories              51 000 E) Special reserves                            12 000
  II. Receivables              40 000 F) Liabilities                                 23 000
 III. Securities                5 000  II. Long-term liabilities                     11 000
 IV. Cash (+4.000)             18 000  III. Short-term liabilities (+4.000)          12 000
C) Accrued assets              20 000  G) Deferred liabilities.                       4 000
TOTAL ASSETS:                 274 000 TOTAL LIABILITIES:                            274 000



                                               60
Fourth-type economic event: retirement if stock at the corporation
The company is informed by its bank that they transferred 6 000 eFt in order to pay off its
long-term debts. The debit memorandum has already arrived. The event affected both the
assets and liabilities side of the balance sheet. While both the total value of assets and
liabilities decreased, the balance-sheet total also decreased.


Opening balance-sheet of a company on 1st January……..              (Data in 1000 HUF)
Assets                               Balance-sheet,                              Liabilities
A.)Long-term Assets             140 000 D) Equity                                 235 000
   I. Intangibles                10 000      I. Issued capital                    200 000
  II. Tangible assets           100 000    III. Capital reserves                   10 000
 III. Financial assets           30 000    IV. Accum. profit reserve               25 000
B) Current Assets               108 000   VII. Profit                                   0
   I. Inventories                51 000 E) Special reserves                        12 000
  II. Receivables                40 000 F) Liabilities                             17 000
 III. Securities                  5 000    II. Long-term liabilities (-6.000)       5 000
 IV. Cash (-6.000)               12 000   III. Short-term liabilities              12 000
C) Accrued assets                20 000  G) Deferred liabilities.                   4 000
TOTAL ASSETS:                   268 000 TOTAL LIABILITIES:                        268 000



Summing up: basic economic activities influence the wealth position of the company.

Effects:

   1. Asset turnover: influences only the composition of the assets, the balance-sheet total
         remains unchanged (the amount of wealth)
   2. Liability turnover: influences only the composition of the liabilities, the balance-sheet
         total remains unchanged (the amount of wealth)
   3. Increase of capital: both value of assets and liabilities increase, thus balance-sheet
         total also increases
   4. Decrease of capital: both value of assets and liabilities decrease, thus balance-sheet
         total also decreases




                                                61
B. Complex economic events: the essence of it is that they do not even influence the wealth
position of a company, but affect income position as well (increase or decrease of generated
earnings)
Events grouped by the relationship to the entrepreneurial activity
1.) Direct relationship to the entrepreneurial activity
   - Increase earnings: increase sales revenue, settlement of capitalized value of self-output
   - Decrease of earnings: emergence of costs, settlement of capitalized value of self-output
2.) Indirect relationship to the entrepreneurial activity
   - Incomings: other earnings, earnings from financial transactions , extraordinary income
   - Expenditures: other expenses, expenses of financial transactions, extraordinary


Examples to complex economic events:
1.) Sales revenue arise, settlement of capitalized value of self-output and decrease of
inventories (direct)
  The company sold finished products of self-output of the value of 10.000 eFt for 14.000 eFt
cash. Finished products decreased by 10.000 eFt, cash stock increases by 14.000 eFt. Increase
of one of the assets is larger than the other. The earnings of the company increases by 4.000
eFt.


Opening balance-sheet of a company on 1st January…            (Data in 1000 HUF)
Assets                               Balance-sheet,                               Liabilities
A.)Long-term Assets            140 000 D) Equity                                   239 000
   I. Intangibles               10 000      I. Issued capital                      200 000
  II. Tangible assets          100 000    III. Capital reserves                     10 000
 III. Financial assets          30 000    IV. Accum. profit reserve                 25 000
B) Current Assets              112 000   VII. Profit (+4.000)                        4 000
   I. Inventories (-10.000)     41 000 E) Special reserves                          12 000
  II. Receivables               40 000 F) Liabilities                               17 000
 III. Securities                  5 000   II. Long-term liabilities                  5 000
 IV. Cash (+14.000)              26 000  III. Short-term liabilities                12 000
C) Accrued assets                20 000  G) Deferred liabilities.                    4 000
TOTAL ASSETS:                  272 000 TOTAL LIABILITIES:                          272 000




                                                62
2. Increase of assets which results in increase of earnings (indirect)
 The company got a machine handed over without reimbursement, which was worth 8.000
eFt at the business partner. The value of the assets of the company increases by 8.000 eFt, and
the total wealth also increases by the same amount.


Opening balance-sheet of a company on 1st January…              (Data in 1000 HUF)
Assets                              Balance-sheet,                               Liabilities
A.)Long-term Assets           140 000 D) Equity                                      239 000
   I. Intangibles               10 000       I. Issued capital                       200 000
  II. Tangible assets (+8.000) 108 000     III. Capital reserves                      10 000
 III. Financial assets          30 000    IV. Accum. profit reserve                   25 000
B) Current Assets             112 000    VII. Profit (+8.000)                         12 000
   I. Inventories               41 000 E) Special reserves                            12 000
  II. Receivables               40 000 F) Liabilities                                 17 000
 III. Securities                 5 000    II. Long-term liabilities                    5 000
 IV. Cash                       26 000   III. Short-term liabilities                  12 000
C) Accrued assets               20 000  G) Deferred liabilities.                       4 000
TOTAL ASSETS:                 280 000 TOTAL LIABILITIES:                             280 000

3. Decrease of liabilities which results in increase of earnings (indirect)
 2.000 eFt of short term liabilities is remitted for the company. That means that the company
does not need to repay its debt of 2.000 eFt, thus value of short term liabilities decreases by
2.000 eFt, and the profit increases by 2.000 eFt.


Opening balance-sheet of a company on 1st January…              (Data in 1000 HUF)
Assets                              Balance-sheet,                               Liabilities
A.)Long-term Assets            148 000 D) Equity                                     249 000
   I. Intangibles               10 000      I. Issued capital                        200 000
  II. Tangible assets          108 000    III. Capital reserves                       10 000
 III. Financial assets          30 000    IV. Accum. profit reserve                   25 000
B) Current Assets              112 000   VII. Profit (+2.000)                         14 000
   I. Inventories               41 000 E) Special reserves                            12 000
  II. Receivables               40 000 F) Liabilities                                 17 000
 III. Securities                 5 000    II. Long-term liabilities                    5 000
 IV. Cash                       26 000   III. Short-term liabilities (-2.000)         10 000
C) Accrued assets               20 000  G) Deferred liabilities.                       4 000
TOTAL ASSETS:                  280 000 TOTAL LIABILITIES:                            280 000




                                                63
4. Movements of liabilities, which result in decrease of earnings (indirect)
 The company offsets its obligation of 2.000 eFt to its supplier by a bill of exchange with a
2.500 eFt face value. The obligation of 2.000 eFt to the supplier ceases, and instead becomes
it a bill debt of 2.500 eFt, which results in a 500 eFt change in the value of short-term
liabilities. Thus the company has a loss of 500 eFt on the event.


Opening balance-sheet of a company on 1st January…             (Data in 1000 HUF)
Assets                              Balance-sheet,                              Liabilities
A.)Long-term Assets           148 000 D) Equity                                     249 000
   I. Intangibles              10 000      I. Issued capital                        200 000
  II. Tangible assets         108 000    III. Capital reserves                       10 000
 III. Financial assets         30 000    IV. Accum. profit reserve                   25 000
B) Current Assets             112 000   VII. Profit (-500)                           13 500
   I. Inventories              41 000 E) Special reserves                            12 000
  II. Receivables              40 000 F) Liabilities                                 17 000
 III. Securities                5 000    II. Long-term liabilities                    5 000
 IV. Cash                      26 000   III. Short-term liabilities (+500)           10 500
C) Accrued assets              20 000  G) Deferred liabilities.                       4 000
TOTAL ASSETS:                 280 000 TOTAL LIABILITIES:                            280 000



5. Decrease of assets, which result in decrease of earnings (indirect)
  The company handed over finished products from its inventories in the value of 5.000 eFt
to a business partner without remuneration. The assets of a company decrease by 5.000 eFt,
and the wealth of the company decrease by the same amount.


Opening balance-sheet of a company on 1st January…             (Data in 1000 HUF)
Assets                              Balance-sheet,                              Liabilities
A.)Long-term Assets           148 000 D) Equity                                     243 500
   I. Intangibles              10 000      I. Issued capital                        200 000
  II. Tangible assets         108 000    III. Capital reserves                       10 000
 III. Financial assets         30 000    IV. Accum. profit reserve                   25 000
B) Current Assets             107 000   VII. Profit (-5000)                           8 500
   I. Inventories (-5000)      36 000 E) Special reserves                            12 000
  II. Receivables              40 000 F) Liabilities                                 15 500
 III. Securities                5 000    II. Long-term liabilities                    5 000
 IV. Cash                      26 000   III. Short-term liabilities                  10 500
C) Accrued assets              20 000  G) Deferred liabilities.                       4 000
TOTAL ASSETS:                 275 000 TOTAL LIABILITIES:                            275 000




                                               64
6. Increase of liabilities that result in a decrease of earnings (indirect)
 The company’s payment of its tax liabilities was overdue last year, therefore they were
imposed a fine of 2.500 eFt. Short term liabilities thus increase by 2.500 eFt and earnings
decrease by the same amount.


Opening balance-sheet of a company on 1st January…                 (Data in 1000 HUF)
Assets                                Balance-sheet,                                Liabilities
A.)Long-term Assets            148 000 D) Equity                                        243 500
   I. Intangibles               10 000      I. Issued capital                           200 000
  II. Tangible assets          108 000    III. Capital reserves                          10 000
 III. Financial assets          30 000    IV. Accum. profit reserve                      25 000
B) Current Assets              107 000   VII. Profit (-2500)                              6 000
   I. Inventories               36 000 E) Special reserves                               12 000
  II. Receivables               40 000 F) Liabilities                                    18 000
 III. Securities                 5 000    II. Long-term liabilities                       5 000
 IV. Cash                       26 000   III. Short-term liabilities (+2500)             13 000
C) Accrued assets               20 000  G) Deferred liabilities.                          4 000
TOTAL ASSETS:                  275 000 TOTAL LIABILITIES:                               275 000



The economic events are done by economic transactions. There are hundreds of economic
transaction at the companies affecting both wealth and income positions day by day. These
changes can not be settled through the balance sheet. The settlements have to be simplified,
but it still has to be a closed system, and be monitored easily.




                                                 65
V. Account of liabilities and assets

The balance sheet is technically inappropriate for registering and settling economic events,
thus it has to be broken down to bookkeeping accounts.




                    Debit            Name of account              Credit




Definition of bookkeeping accounts: a double-sided register, which is used for continuous
registration of economic events, based on book-keeping rules.
Left side = Debit side         D
Right side = Credit side       C
The balance sheet and the account are formally similar, but their purpose and function and
content are quite different.


Data files of account of liabilities and assets:
    a. Opening value
    On the opening balance-sheet, the assets and liabilities have an initial opening value. This
    sum is written onto the respective side of the account.
        For ASSETS, characteristically to the D-side
        For LIABILITIES, characteristically to the C-side
   The opening value is represented on the account = OPEN
    b. Turnover data
    The results of the economic events are registered onto the respective accounts. If one side
    of the account is summed, we can get the turnover.
       We can differentiate:
                „DEBIT” turnover            „CREDIT” turnover




                                                   66
   c. Gross sum
   If the turnover data is added to the opening value, the gross sum can be calculated.
         We can differentiate:
                „DEBIT” gross sum           „CREDIT” gross sum
   d. Balance
   The difference of the two gross sums of an account is called balance.
      a./ If the DEBIT gross sum is larger, the account has a DEBIT balance.
      b./ If the CREDIT gross sum is larger, the account has a CREDIT balance.


Types of accounts:
1. Asset and liability accounts:
  - substitute the different lines of the balance-sheet
  - at least one account is assigned to each line of balance-sheet, but it is arbitrarily
specifiable


Assets                                  Balance-sheet                                 Liabilities


  D                Asset account        C            D            Liability account           C


   O:                                                                                 O:
                   +         -                                      -          +
                                       C.            C.




a.) Characteristics of the asset account:
 - the opening value is always written on the D side
 - the increase is always registered on the D side
 - the decrease is always registered on the C side
 - usually has a D balance
 - the closing value is booked on the C side, thus the account is closed without a balance




                                                67
b.) a.) Characteristics of the liability account:
 - the opening value is always written on the C side
 - the increase is always registered on the C side
 - the decrease is always registered on the D side
 - usually has a C balance
 - the closing value is booked on the D side, thus the account is closed without a balance


2. Earnings accounts
a.) Characteristics of cost and expenses accounts:
  - these accounts have no opening values, but they are carried forward if there is an
economic event, which affects the earnings
  - arising costs and expenses (increase) are booked on the D side of the account
  - the decrease is booked on the C side of the account
  - usually has a D balance
  - at the end of the period, the accounts are not closed, but settled


b.) Characteristics of income accounts
  - these accounts have no opening values, but they are carried forward if there is an
economic event, which affects the earnings
  - arising income (increase) is booked on the C side of the account
  - the decrease is booked on the D side of the account
  - usually has a C balance
  - at the end of the period, the accounts are not closed, but settled


3. Other accounts
a.) Technical-type accounts: have no economic content. E.g.: opening balance-sheet
account, closing balance-sheet account.
b.) Absorption account: the dataset of this account rectifies the dataset of another ledger
account. E.g.: an amortization account can be related to an asset account, which rectifies the
gross value to net value; settlement price of materials in inventories can be adjusted to the
effective initial price.




                                                68
VI. Standard form of accounts


Economic events are settled on ledger accounts if the economic subject use double entry
book-keeping. There are many ways to shape the system of the ledger accounts, and the
different registering methods. Thus, there would be a plenty of different systems, if the
economic subjects could choose the systems and the registering methods independently. It
would make the composition of reports and the orientation in the registers more difficult.


Avoiding this problem, the Accountancy Act defines a standard form of accounts.


The standard form of accounts builds up from 10 sections of accounts.
Balance accounts
a.) Asset accounts
   1. Fixed assets
   2. Inventories
   3. Receivables, financial assets and accrued liabilities
b.) Liability accounts
   4. Liabilities
Accounts of expenses
   5. Cost types
   6. Cost centre, general expenses (not mandatory to use)
   7. Cost of activities
Earnings account
   8. Cost of manufactured goods sold and expenditures
   9. Income and sales revenue
Technical-type accounts
   0. Register accounts




                                               69
Entrepreneurial standard of accounts: according to the directives of the standard of accounts,
the economic subject is required to build up its own chart of accounts, which also meets the
Accountancy Act.




It contains two parts:
a.) chart of accounts: it contains the ledger accounts (the account number in ascendant order)
according to the standard of accounts.
b.) narrated system of accounts: it contains the details and explanations related to the certain
standardized accounts, and the connection between the ledger accounts and analytical
registers. The voucher system which underpins the settlements has to be also regulated.


The scheme of accounts is the standardized and coherent system built up from the ledger
accounts used for bookkeeping settlements.


 2.      account section     Inventories
 21.     account category    Materials
 211.    account              Basic materials
 2112. sub-account             Furniture board
 21123. detailed account      50 mm furniture board




                                                70
VII. The bookkeeping process

The economic event affects the companies’ wealth and income position. Determining whether
the certain changes are booked on the debit or credit side of which accounts, is called editing
an account entry. The date of bookkeeping, the short content of the economic event, the
names of the affected accounts and the amount to be registered have to be known in order to
edit an accounting item. The effects of the economic events on the wealth and income
position of the company have to be analyzed.


Registering the economic events:
 - account series: registration of resources by holdings on ledger accounts; each economic
event affect one debit side of an account, and a credit side of another account!
- synthetically: consolidated, only in value
- analytical: in details, in quantity and value
 - time series: the effects of the economic events are registered chronologically in a diary.
Content of a diary:
- ordinal number /- date /- reference /- name of debit and credit accounts,
- description of the economic event / - registered value of debit and credit.


                             Diary, 20….. yr ……………… m                                  ……pg
Number    Date        D account number   C account number   Description of      Debit      Credit
                      D account name     C account name     economic event      value Ft   value Ft




          Transfer:/Total:

Settlement system of diaries:
- Single basis book settlement system: each economic event is registered in one single diary
- Multiple basis book settlement system: the economic events related to the different
properties are registered in separate diaries, and mixed diary is also used.
e.g.: cash book, supplier book, customer book, etc.




                                                  71
The management of time series and account series settlement can happen by:
- parallel method: time series and account series settlement are registered in separately
- transcription method: two settlement in one task.


IMPORTANT!
Double accounting means that economic events are registered once on the debit side of an
assets, liability, cost/expenditure, earnings account, and at the same time, on the credit side of
another account with same amount.


Settlement process:
1. Opening the accounts:
Lines of opening balance are charged off to the accounts.
In two steps: 1. opening asset accounts,
                2. opening liabilities accounts.
Opening balance-sheet account (technical account)
The opening account on 1st January has to be equal to the closing account on 31st December
in the previous year. Lines of the opening account can be broken down on the ledger
accounts.


Other claims:
- debts due to employees
- debts due to state budget
- debts to other economic subjects


Other short-term liabilities:
- liabilities to employees: income settlement account
- liabilities to state budget: corporate tax, personal income tax
- social security liability
- liabilities to other economic subjects


The balance of the opening account is zero. It is useful to run an account register of the
opened accounts.




                                                   72
2. Continuous interim bookkeeping:
In case of an economic event, the same amount has to be registered onto a debit side of an
account and onto a credit side of another account. The accounting of the economic events is
done on ledger accounts, or on diary, or on both.


3. Closing of accounts:
Controlling adequacy of bookkeeping, consolidation and systematization of dataset of the
accounts. Thus the dataset of accounts becomes appropriate to build up the report. This
process has to be executed at least once a year.
Tasks:
- reconciliation of analytical and ledger registers,
- stocktaking tasks,
- task due to Accountancy Act,
- summing up, controlling of economic events, make up the trial balance,
- settlement of those economic events between the accounting date and the date of the
construction of the balance-sheet, which has an effect on the earnings of the financial year
closed by the balance-sheet.
Managing the accounts:
- all of the balances of the earnings accounts are transferred to the profit-after-taxation offset
account
- settlement of corporate tax,
- settlement of dividends, possible involvement of accumulated reserves for dividends,
- determine profit and loss according to the balance sheet.


Closing: The balances of the accounts are written in the opposite side of the account in order
to equalize the account; the closing balance sheet account is used as a controlling account,
which has no balance (technical account).


Controlling in the process is important. Main tool of it is the trial balance.
Definition: cumulative statement based on the dataset of the accounts opened during the
period




                                                73
Compulsory equations in the trial balance:
    1. Debit and credit gross sum (turnover) equals => trial balance
    2. The gross sum is equal with the gross sum of the turnover in the diary.
    3. Debit and credit balance equals => rough balance
    4. The cumulative balance of the balance accounts are equal the balance of the earnings
         accounts with a negative indication.
The equations above have to be always checked!


                                    Trial balance 20…. yr
Number Number and name of                         Turnover                     Balance
       account                               Debit       Credit        Debit             Credit




            Total:



Levels of accounting process:
Economic event  Voucher  General register  Analytical register  General ledger
transaction  Report


General registers:
Function: ensure accountability and responsibility. It must be developed where accounting is
used for property protection as well.
Forms:
- stock book, stock registration sheet in store,
- animal register,
- cash report,
- personal register, etc.




                                                   74
General document: primary voucher, which is filled out at the place of the economic event in
one piece (remains at the place).
Measurement method: in quantity
Drawer: stocker (storekeeper), division manager, cashier


Analytical registers:
If the effects of the economic events are primarily registered here, thus consignments are
created from the dataset of the analytical registers for the general ledger transaction. It must
be conducted continuously. These can be general documents for inventories.
Forms:
- bookkeeping of material
- bookkeeping finished products
- bookkeeping of current accounts of customers
- bookkeeping of current accounts of suppliers
General document: primary vouchers
Measurement method: in quantity and value
Drawer: accountant of materials, or accountant of current account
After the accounting closing, an abstract has to be made on the analytical registers. The
consignment is based on these abstracts. The consignment accumulates the different changes
in an asset during the period, and pre-manages it for the general ledger transaction.


General ledger transaction:
Value registration, syntactical bookkeeping, consolidated bookkeeping. Confirming the
report, serving internal information-demand.
Forms: Two version: ledger account (economic events have to be registered by their content)
and diary (economic events have to be registered in order of they emerge).
Diaries: Opening diary, Bank diary, Cash diary, Mixed diary, Closing diary.
General document: consignments of analytical registers, and primary vouchers
Vouchers of ad hoc economic events, whose analytical register is not organized by the
company, are used here without collection.
Measurement method: only in value
Drawer: ledger accountant, automatic accountant.
Trial balance has to be made, which is a connection between the accounting settlement and
the report.


                                               75
Report:
Financial report that exhibit the wealth, financial, and income situation and their change of the
company. Provide a real and reliable picture for the market participants.
Confirming document: trial balance and inventory.
Drawer: chief accountant, the company and the auditor is responsible for the originality
Measurement method: balance-sheet, earnings report: only in value; notes to the financial
statement: value and quantity.


Relationship between the levels:
- Primary vouchers connect the general registers and analytical registers.
- The equation between the analytical register and the general ledger transaction is based on
that the general ledger transaction is conducted by the consignments. Both registers register
the same things, only the details of the records are different
- The relationship of the general ledger transaction and the report is the trial balance.


Reconciliations: filtering out the differences between the different levels. E.g.:
- reconciliation of the last-day closing balance of the petty cash with the balance of the
balance of cash account,
- reconciliation of the closing balance of the deposit account for settling of accounts and the
balance of the bank statement on the last day in the last month ,
- reconciliation of the current account of the suppliers and the registers of business partners,
- reconciliation of tax registers with statements from tax authority.


Summary


Sessions of accounting tasks:


Opening: Bookkeeping begins with the opening. The books of a certain year are closed, the
closing data form the subject year become the opening data for the following year. At the
opening, the balance-sheet is broken down to ledger accounts.




                                                76
Interim settlement of economic events: only based on filled vouchers. Keeping deadlines
precisely! In the synthetic and analytical registers economic events are not required to be
registered continuously. The effects of these economic events have to be registered until the
accounting closing at the latest.


Closing tasks: at the end of a certain calendar period. Technical closing of auxiliary,
adjusting, reconciling, and aggregate items and accounts.
- monthly accounting closing,
- quarterly accounting closing,
- yearly accounting closing. – according to the instructions of the Accountancy Act
Ledger accounts become systematized due to the yearly closing works, and their content
becomes appropriate for constructing the report. Trial balance is filled out.


Constructing the report: based on the trial balance. The economic subject (registered in the
trade register) which is conducting a double-entry bookkeeping is required to deposit the
annual report (or simplified annual report) - accepted by the board entitled for validation - and
the proposal for the utilization of the post-tax profit to the trade register within 150 days after
the date of the construction of the balance sheet. Entrepreneurs, conducting single entry
bookkeeping, have to make simplified report in the same manner. The date of the creation of
the balance sheet has to be set in the accounting policy.


Closing: After setting up the balance sheet and the earnings report, the entrepreneur have to
close the books. This is the base of the opening of the following year.


See: 1. graph




                                                77
VIII. Single entry bookkeeping


General characteristics of single entry bookkeeping
Single entry bookkeeping contains the register of the economic events of cash flows, financial
assets, and liabilities of financial assets, and the auxiliary and analytical registers required for
the composition of simplified balance-sheet. This is a separate and substantive bookkeeping
system of the accounting, which is based on the principle of financial compliance (financial
realization principle). The principles used in accounting is as relevant for this as for the
double-entry bookkeeping.


For single bookkeeping, cash book, diary ledger, and other methods (electronic bookkeeping,
etc.) can be applied.


   2. The cash book is a table-type register used for settling cash turnover, which has the
       details of the final cash income and cash expenses on their headings
   3. The diary ledger is the detailed table-type register of the total cash turnover of other
       organizations, in which those items are settled beyond cash flow items, that have no
       effective turnover behind them, but the settlement is compulsory due to the
       instructions related to the simplified balance-sheet (e.g.: cash claim, amortization after
       investments specified by law, write down of uncollectible cash claims, financially
       unsettled value added tax in subject year, settlement of corporate tax at the end of
       subject year, etc.)


Singe-entry bookkeeping with a computer is applicable without limitations considering the
technical and accountancy requirements. Beyond the general requirements, regarding the
technical requirements, the accounting vouchers and registers made on a computer have to
contain the registration number of the software used in the computer, and the registration
number of the dataset. If the accounting voucher or register is readable with a machine, it is
required to ensure that the data can be visibly exhibited or printed in time. In order to identify
the dataset, there must be an up-to-date and actualized code catalogue available.




                                                 1
        Regarding the items settled under the cash flow accounting, controlling of mandatory
        numerical equations must be ensured.
Whatever technique is used, the following requirements must be met:
    -   the applied system must be closed,
    -   the numerical equitation of settlements must be ensured,
    -   it has to contain the data related to the cash circulation, which is necessary to the tax
        settlement.


General rules applied for single-entry bookkeeping
General rules are the following:
1./ Turnover of bank accounts and the cash office (total cash flow of the enterprise) must be
registered.
2./ The revenue and outgoing balances of cash flow of bank accounts and cash office exhibit
the receivables against the bank and the cash at hand.
3./ During the economic activity, revenue materializes, thus the cash flow is exhibited as
source of revenue.
4./ Turnover of bank account and cash office = income sources - settled cash turnover at
utilization
5./ Data can be registered to the registers conducting single-entry bookkeeping based only on
accounting vouchers.
6./ The entrepreneur or its legal agent is responsible for the continuous and accurate
bookkeeping, which fits the requirements by law.
7./ No heading is left empty.
8./ Each line contains an economic event.
9./ In the column indicating the date, the date of the settlement of the item must be written.
10./ For the number of invoice, either the effective data or an own code system (univocally
identifiable) must be written.




                                                2
According to the operative Accountancy Act and the Act on Personal Income Taxation, the
following registers are required to be conducted to assess the taxable income:


1./ General registers:
- revenue registers,
- income and cost registers,
- cash book,
- diary ledger.


2./ Specification registers:
- register of receivables from customers,
- register of payables to suppliers,
- register of tangible assets (discrete registration sheet),
- consolidated register of tangible assets (lower than 100 000 Ft discrete purchasing value),
- register of machinery, equipments not solely for operating use
- register of intangibles,
- register of capital gains,
- register of wages and other personnel-type expenses,
- transit register,
- register of goods on commission,
- register of other receivables,
- price register,
- register of changes in prices,
- inventories sheet,
- register of subcontractors,
- register of strict accounting vouchers.
The entrepreneur chooses a general registration method, and completes it with the continuous
conduction of specification registers.


     Income register must be conducted by those private individual pursuing independent
        activities, who settle its income using cost or income quota E.g.: agricultural labourer.




                                                  3
    Income and cost registers must be conducted by those private individual pursuing
       independent activities, who are private entrepreneurs, not included in the VAT system,
       have no employee and do not employ a member of a family.


Private individuals conduct cash book or diary ledger in the following cases:
- in their activity they are allowed to deduct VAT, or after their activity they are required to
pay VAT,
- if they are private entrepreneurs,
- if (independently from the above mentioned) private entrepreneurs employ employee or
member of family,
- if they choose to conduct the cash book or diary ledger, because they meet the regulations
according to the Accountancy Act.


VIII/1. Diary ledger


Since 1. January 2004, those entrepreneurs (regulated by Accountancy Act) can use the
simplified report, which chooses this bookkeeping method previously (except the
entrepreneurs, other organization by different regulation).


For setting up the report, there is a need for a registers, which ensure the required data for the
report. If the entrepreneur chooses the simplified report, the single-entry bookkeeping is
mandatory for him. In this case, they have to conduct diary ledger, beyond the analytical
registers. See: 5. Appendix
Independent entrepreneurs can also choose using diary ledger. Independent from this, they are
still under the Act on Personal Income Taxation


Structure of diary ledger
Diary ledger consists of two parts:
a.) cash flow headings:
   - bank account (income, outgoings, balance)
   - cash office (income, outgoings, balance)
b.) specification headings:
  - sales revenue and income (included in base of PIT)
  - revenue, not generating other earnings (not included in base of PIT)


                                                4
  - VAT payable
  - production costs and other revenue: materials and cost of goods purchased, wages, duties
on wages, other production costs and expenditures (deductible from PIT base)
  - other expenses (not deductible from PIT base)
  - deductible VAT
  - receivables (3 pairs of increase/decrease headings)
  - payables (3 pairs of decrease/increase headings)
  - settlement of earnings from financial activities (one decrease/increase pairs of headings)
  - issued capital and capital reserves (one decrease/increase pairs of headings)
Non-profit organizations have to register the revenues and outgoings from general activity
and the revenues and outgoings from operations separately.


Gneral rules of conduction the diary ledger
The total business cash flow has to be registered!
1.) Each cash flow items must be registered immediately, (upon arriving) based on the
accurate vouchers and statements of financial institutions.
2.) Revenues and outgoings must be registered in a daily breakdown, once in 10 days at least.
3.) Diary ledger is consolidated monthly, but at latest; until the 12th day of the following
month after the subject.
4.) Instruction: closing on the last day of the year.
5.) Arising mistakes in the register can be corrected with crossing out the mistake. The correct
value must be written than.
6.) The following data have to be exhibited regarding all cash flow items: number of item
(pre-issued), date of settlement, invoice number, indication of text (item).
7.) All economic events, which are not registered in the diary ledger, must be booked in an
analytical register.
8.) Only those economic events can be registered, which result in monetary movements. Total
sum of receivables from suppliers and customers can not be exhibited in the diary ledger.
9.) The economic events can be registered - beyond cash flow headings - in one or more
10.) Parallel with the cash income, one of the income headings of the specification headings
can be also used for booking, or to the decrease of receivables heading, or to the increase of
payables headings.
11.) Parallel with the cash outgoing, we can register to one of the outgoings headings or to the
increase of receivables heading, or to the decrease of payables headings.


                                                 5
The enterprise must have a bank account in case of using diary ledger. The balance of this
account (together with the cash office) must be conducted on the diary ledger sheet. If there is
any change, it must be registered on the revenue or outgoings column of the respective cash
flow headings. Similarly to the cash book, after the headings exhibiting the cash flows of the
bank and cash office, the concrete revenues and expenses are exhibited in details. The only
difference is that, the diary ledger is expanded with the headings of receivables, payables,
settlement of financial earnings, issued capital and capital reserves. One of the columns
indicate the increases, the other indicates the decreases. Interesting relationship with the
double-entry bookkeeping is that the increases are registered on the left side of the column-
pairs, and decreases for the right side in case of receivables (for liabilities everything is the
reverse). On the blanks which are available in the retail markets, there 3-3 pairs of columns at
the receivables and payables. Above these there are empty column headings in order to
indicate the titles. This is because the pairs of headings are named by the accountant,
considering the effective content of the arising economic events. In case of receivables
(receivables with cash movements), the following headings can exist: transfer (transfer of
turnover between bank and cash office, different bank accounts or different cash offices),
advance payments, bills receivables. In case of payables (payables with cash movements):
payables for Tax Authority (personal income tax, pension insurance fund, heath insurance
fund, duties payable by employees, payables for private pension funds, loans and debts.


General rule: if the enterprise has revenue, it must be registered in the first column of the
respective pair of cash flow headings. The related details must be written in the second
column of the specification headings. If the enterprise has outgoings, it must be registered in
the second column of the respective pair of cash flow headings. The related details must be
written in the first column of the specification headings. It is because the revenue is
accompanied by decrease in receivables or increase of payables.




During the accounting process, the items are always registered in one cash flow heading and
one specification heading. Deviation from this is only allowed at closing.




                                               6
When we count by the financial result, we drive through the amount of revenues on side of
the increasing and the amount of the expenditure to the decreasing. The difference of these
two gives the financial result.
Determination of the income of the entrepreneur:
   + The revenue of the selling and revenues
   -    Themes, which decrease the revenue (according to the tax law)
   -    Accounted production costs and expenditures in the general journal
   -    Costs, which cannot be accounted in the general journal (for example: depreciation
        expense)
        Revenue, after which you have to pay tax


Most frequent economic events
                                      Cash          flow         Specification headings
Economic activities                   headings                      I.                II-
Property deposit                      Bank       account Issued          capital
                                      (cash) Income.       and           capital
                                                           reserve +
Compensating account of purchases Bank account             Materials          – VAT
of materials with transfer            Expenditure          purchase          of deductible
                                                           goods
Purchase of materials for cash        Cash office          Materials          – VAT
                                      Expenditure          purchase          of deductible
                                                           goods
Compensating account of tangibles Bank account             Other                   VAT
with transfer                         Expenditure          expenditures            deductible
Sale of goods for cash                Cash office          Revenue        from VAT
                                      Income               sales and incom.        payable
Credited receivables on sale of Bank account               Revenue        from VAT
goods                                 Income               sales                   payable
Advancement for employees             Cash office          Receivable
                                      Expenditure          (Advancements)
                                                           +
Cash withdraw                         Cash office



                                               7
                                       Expenditure
Wages                                  Cash office or Wages
                                       bank account
                                       Expenditure
Deductions                             Cash office or receivables
                                       bank account    (advancements)
                                       Expenditure     –
Transferring VAT payable               Bank account    Other expenses
                                       Expenditure
Transferring energy, water, gas Bank account           Cost              of VAT
bills                                  Expenditure     materials        and deductible
                                                       purchase          of
                                                       goods
Compensating telephone bill with Cash office           Other                  VAT
cash                                   Expenditure     production costs       deductible
Transferring duties payable            Bank account    Duties on wages
                                       Expenditure
Transferring    duties   and    PIT Bank account       Liabilities
deducted from employees                Expenditure     -
Transferring rent fees                 Bank account    Other                  VAT
                                       Expenditure     production costs       deductible
Borrowing according to the bank Bank account           Liabilities +
statement                              Expenditure     (Loans)
Paying out advertising costs in cash   Cash office     Other                  VAT
                                       Expenditure     production costs       deductible
Interest, according to the credit Bank account         Revenue         from
statement                              Income          sales
Loan and interest repayment            Bank account    Liabilities -
                                       Expenditure     Other
                                                       production costs




                                                8
Exercises
4.1. Sign in the chart, in which heading of the general journal we have to account the
economic events. If it has to be accounted just analitically, put X into the proper heading.


Economic events                       Headings of the         Detailed headings     Analitical
                                      circulation   of       I.               II.   registration
                                      money
Order invoiced to the customer +
VAT
Credit of the demand
Buying fixed asset according to the
receipt
Paying the previous receipt from
bank account
Wage paying


Deduction of the advance money


Deduction of the personal affix
Transfer of the affix, which the
company has to pay
Paying advance payment to the
employee


Phone bill paying in cash (VAT)
Bank cost according to the bank
report
VAT debt paying according to the
report
Selling in cash (VAT)


Transfer of the rent fee according
to the report (VAT)
Interest credit according to the
bank report
Petrol buying in cash




                                                         9
4.2. A foundation leads single-entry bookkeeping in general journal. It counts it according to
the subjective of the VAT and the general regulation.
Write in the chart next to the given economic event the proper heading of the general journal.


Bank account                             Demands
Checkout                                 Liabilities
Revenue and other income                 Financial result
Other revenues, which don’t create result     Subscribed capital and capital reserve
VAT, which has to pay in                 Material and goods buying
Wage                                     Other production costs
The common charge of the wages           Other expenditures
VAT, which can be deducted
Economical event        Checkout or               Detailed headings          Only analitical
                        bank account         I.                   II.        accounting
Borrowing (credit
note)
Selling of the good
Material buying for
cash
Transfer of the
liability
Getting down the
interest from the
bank account
Buying fixed asset
for cash
Transfer of the
offset of the service
Transfer of wages
Depreciation
expense




                                              10
4.3. The entrepreneurship of Pali Baki uses single-entry bookkeeping, VAT is the tax
subjective. The opening datas of the 1st of January 2006 are the following ones:


The balance of the bank account                        540.000
The balance of the checkout                            360.000
The balance of the stocks e                            360.000
The balance of the other liabilities                   180.000
Credit debt for investmen                              720.000
Other liabilities                                      144.000
Financial result                                        36.000
Subscribed capital                                      540.000


Lead into the general journal the opening datas,, then account the economic events of January
and February! At the accounting of the economic events at the themes, which contain VAT,
the key of VAT is 20%.


Economic events of January and February 2006:
January
1st : Opening of the general journal
3rd : One of the employees of the entrepreneur paid back 54.000 Ft loan in cash.
8th : From its own produced inventories the entrepreneur sold for 180.000 Ft gross selling
price for cash.
10th : The entrepreneurship sold the half of its stocks for 144.000 Ft cash.
12th : A report was arrived about the transfer of the 300.000 Ft supplier debt. The entrepreneur
bought machine from the supplier, which serves directly the activity of the company for over
a year.
15th : Interest credit is 12.800 Ft at the bank account leading bank of the company.
16th: One of the employees of the entrepreneur borrowed 12.000 Ft.
18th : The entrepreneurship sold goods on 72.000 Ft selling price.




                                               11
February
3rd : For the employees the entrepreneur pays the wage of January.
        Gross wage                                        200.000
        Reductions: Personal income tax prepayment          36.000
                     Employee affix                          2.000
                     Pension and health insurance affix     25.000
                     Salary prepayment                       3.600
                     Judge forbidding                        9.000
12th : Arriving the report of the account leading bank about the transfer of 58.000 Ft health
and social insurance affix, 6000 Ft employer affix, 25.000 Ft pension and health insurance
affix, 38.000 Ft personal income tax prepayment and employee affix with 10th date.
16th : Arriving the report of the account leading bank of 9000 Ft judge forbidding with 11th
date.
22nd : Arriving the report of the account leading bank about 80.000 Ft debt paying and 10.000
Ft interest transfer with 21st date.
26th : The entrepreneur from his self-manufactured inventories sold in the value of 450.000 Ft.
27th : Arriving the report of the account leading bank about the transfer of 900.000 Ft demand
with 26th date (The entrepreneur sold goods for the customer.)
28th : The entrepreneurship paid its advertising receipt in cash (45.000 Ft)




                                                12
Book the following economic events onto the diary ledger!


Economic event                Cash flow          Specification headings   Analytical
                              headings              I.            II.     register




                                            13
                                              Appendix
1. Appendix



                              Required breakdown of balance-sheet
                                                „A” version
Assets
A. Long-term assets
   I. Intangibles
          1. Capitalized value of formation, promotion and restructuring expenses
          2. Capitalized value of research and development
          3. Intangible rights
          4. Intellectual property
          5. Goodwill
          6. Advancement given on immaterial goods
          7. Value adjustment of intangibles
   II. Tangibles
          1. Real assets and related intangible rights
          2. Technical equipment, machinery, vehicles
          3. Other equipment, furniture, fittings, tools, fixtures, vehicles
          4. Sires animals
          5. Investments, reconstructions
          6. Advancement given on investments
          7. Value adjustment of tangibles
   III. Financial assets
          1. Permanent holdings in joint venture
          2. Permanent given loan to joint venture
          3. Other permanent holdings
          4. Permanent given loan to enterprise in other holding relationship
          5. Other permanent given loan
          6. Permanent debt securities
          7. Value adjustment of financial assets
          8. Valuation difference of financial assets

B. Current Assets
   I. Inventories
         1. Materials
         2. work-in-progress products
         3. Pup-, fatstock, and other animals
         4. Finished products
         5. Goods
         6. Advancement given on inventories
   II. Receivables
         1. Trade debtors (receivables from customers)
         2. Receivables from joint venture
         3. Receivables from enterprise in other holding relationship
         4. Bills receivable
         5. Other receivables
         6. Value adjustment of receivables
         7. Positive value adjustment of derivative transactions




                                                       14
 III. Securities
         1. Shares in joint ventures
         2. Other shares
         3. Own shares and partnership shares
         4. Debt securities for endorsement
         5. Valuation difference of securities
   IV. Cash
         1. Cash, cheque
         2. Bank deposit

C. Accrued and deferred assets sources
        1. Accrued and deferred income
        2. Accrued and deferred costs
        3. Deferred expenditures
TOTAL assets


Liabilities
D. Equity
   I. Issued capital
          Repurchased holding in nominal value
   II. Unpaid issued capital (-)
   III. Capital reserves
   IV. Accumulated profit reserve
   V. Engrossed reserves
   VI. Valuation reserve
          1. Valuation reserve of valuation adjustment
          2. Reserve of real valuation
   VII. Profit and loss according to the balance sheet

E. Special reserves
        1. Special reserves for the anticipated obligations
        2. Special reserves for future costs
        3. Other special reserves

F. Liabilities
   I. Deferred liabilities
         1. Deferred liabilities against joint venture
         2. Deferred liabilities against enterprises in other holding relationship
         3. Deferred liabilities against other economic subjects
   II. Long-term liabilities
         1. Long-term loans
         2. Convertible bonds
         3. Debt on the issue on bonds
         4. Investment and development credits
         5. Other long-term loans
         6. Long-term liabilities against joint venture
         7. Long-term liabilities against enterprises in other holding relationship
         8. Other long-term liabilities
   III. Short-term liabilities
         1. Short-term credits
         2. Short-term loans
         3. Advances received from customers
         4. Trade creditors (accounts payable)
         5. Bill of exchange debts
         6. Short-term liabilities against joint venture
         7. Short-term liabilities against venture with other holding relationship
         8. Other short-term liabilities
         9. Valuation difference of liabilities
         10. Negative valuation difference of derivative transactions



                                                         15
G. Accrued and deferred liabilities
        1. Accrued and deferred income
        2. Accrued and deferred costs and expenses
        3. Deferred income
TOTAL liabilities



2. Appendix


                              Required breakdown of balance-sheet

                                                „B” version
A. Long-term assets
   I. Intangibles
          1. Capitalized value of formation, promotion and restructuring expenses
          2. Capitalized value of research and development
          3. Intangible rights
          4. Intellectual property
          5. Goodwill
          6. Advancement given on immaterial goods
          7. Value adjustment of intangibles
   II. Tangibles
          1. Real assets and related intangible rights
          2. Technical equipment, machinery, vehicles
          3. Other equipment, furniture, fittings, tools, fixtures, vehicles
          4. Sires animals
          5. Investments, reconstructions
          6. Advancement given on investments
          7. Value adjustment of tangibles
   III. Financial assets
          1. Permanent holdings in joint venture
          2. Permanent given loan to joint venture
          3. Other permanent holdings
          4. Permanent given loan to enterprise in other holding relationship
          5. Other permanent given loan
          6. Permanent debt securities
          7. Value adjustment of financial assets
          8. Valuation difference of financial assets

B. Current Assets
   I. Inventories
         1. Materials
         2. work-in-progress products
         3. Pup-, fatstock, and other animals
         4. Finished products
         5. Goods
         6. Advancement given on inventories
   II. Receivables
         1. Trade debtors (receivables from customers)
         2. Receivables from joint venture
         3. Receivables from enterprise in other holding relationship
         4. Bills receivable
         5. Other receivables
         6. Value adjustment of receivables
         7. Positive value adjustment of derivative transactions




                                                       16
    III. Securities
          1. Shares in joint ventures
          2. Other shares
          3. Own shares and partnership shares
          4. Debt securities for endorsement
          5. Valuation difference of securities
   IV. Cash
          1. Cash, cheque
          2. Bank deposit

C. Accrued and deferred assets sources
        1. Accrued and deferred income
        2. Accrued and deferred costs
        3. Deferred expenditures

D. Liabilities expiring in one year
         1. Short-term credits
         2. Short-term loans
         3. Advances received from customers
         4. Trade creditors (accounts payable)
         5. Bill of exchange debts
         6. Short-term liabilities against joint venture
         7. Short-term liabilities against venture with other holding relationship
         8. Other short-term liabilities
         9. Valuation difference of liabilities
         10. Negative valuation difference of derivative transactions

G. Accrued and deferred liabilities
        1. Accrued and deferred income
        2. Accrued and deferred costs and expenses
        3. Deferred income

F. Current assets – difference of short-term liabilities (B+C-D-E)

G. Total sum of assets after deduction of liabilities expiring in one year (A+F)

H. Liabilities expiring beyond one year
   I. Long-term liabilities
         1. Long-term loans
         2. Convertible bonds
         3. Debt on the issue on bonds
         4. Investment and development credits
         5. Other long-term loans
         6. Long-term liabilities against joint venture
         7. Long-term liabilities against enterprises in other holding relationship
         8. Other long-term liabilities
   II. Deferred liabilities
         1. Deferred liabilities against joint venture
         2. Deferred liabilities against enterprises in other holding relationship
         3. Deferred liabilities against other economic subjects

I. Special reserves
         1. Special reserves for the anticipated obligations
         2. Special reserves for future costs
         3. Other special reserves




                                                         17
J. Equity
    I. Issued capital
           Repurchased holding in nominal value
    II. Unpaid issued capital (-)
    III. Capital reserves
    IV. Accumulated profit reserve
    V. Engrossed reserves
    VI. Valuation reserve
           1. Valuation reserve of valuation adjustment
           2. Reserve of real valuation
    VII. Profit and loss according to the balance sheet




                                                          18
3. Appendix

                             Required breakdown of earnings report
                                     (Overall cost method)
                                          „A” version

01. Net domestic sales
02. Net external sales
         I. Sales revenue (01+02)
03. Change in self-manufactured inventories
04. Own work capitalized
         II. Capitalized value of self output (+03+04)
         III. Other revenues
              From this: reversal of the loss in value
05. Cost of materials
06. Value of services consumed
07. Value of other services
08. Purchasing cost of goods sold
09. Value of services sold (mediated)
         IV. Material-type expenses (05+06+07+08+09)
10. Wage cost
11. Personal-type other expenses
12. Wage duties
         V. Personnel charges (10+11+12)
         VI. Amortization
         VII. Other expenses
               From this: depreciation
A. Income from operations (I+II+III-IV-V-VI-VII)

13. Income from investments
    From this: from joint venture
14. Exchange profit on sale of shares and participations
    From this: from joint venture
15. Interest and exchange profit on financial assets and investments
    From this: from joint venture
16. Other interest receivable and similar income
    From this: from joint venture
17. Other income from financial activities
    From this: valuation margin
         VIII. Income from financial activities (13+14+15+16+17)
18. Exchange loss on financial assets and investments
    From this: to joint ventures
19. Interest payable and similar expenses
    From this: to joint ventures
20. Depreciation of shares and participations, securities and bank deposits
21. Other expenses of financial activities
    From this: valuation margin
         IX. Expenses of financial activities (18+19+20+21)
B. Earnings from financial activities (VIII-IX)

C. Profit on ordinary activities (+A+B)
         X. Extraordinary income
         XI. Extraordinary expenses
D. Extraordinary earnings (X-XI)
E. Earnings before taxes (+C+D)
         XII. Tax payment obligation
F. Earnings after taxes (+E-XII)
22. Use from the accumulated profit reserve for dividends and profit sharing



                                                        19
23. Approved dividends and shares
G. Profit and loss according to the balance-sheet (+F+22-23)


                             Required breakdown of earnings report
                                     (Overall cost method)
                                          „B” version
Expenses
I. Decrease of self-manufactured inventories
          01. Cost of materials
          02. Value of services consumed
          03. Value of other services
          04. Purchasing cost of goods sold
          05. Value of services sold (mediated)
II. Material-type expenses (01+02+03+04+05)
          06. Wage cost
          07. Other personnel-type expenses
          08. Wage duties
III. Personnel-type expenses (06+07+08)
IV. Amortization
V. Other expenses
    From this: depreciation
VI. Operating expenses (I+II+III+IV+V)
A. Earnings from operations (VI<XIV)

        09. Exchange loss of financial assets and investments
            From this: to joint venture
        10. Interest payable and similar expenses
            From this: to joint venture
        11. Depreciation of shares and participations, securities and bank deposits
        12. Other expenses of financial activities
            From this: valuation margin
VII. Expenses of financial activities (09+10+11+12)
B. Earnings from financial activities (VII<XV)

C. Profit on ordinary activities [(A+B)>(H+I)]
VIII. Extraordinary expenses
D. Extraordinary profit (VIII<XVI)
E Earnings before taxation [(C+D)>(J+K)]
IX. Tax payment obligation
F. Earnings after taxation [(E-IX)>O]
X. Approved dividends and shares
G. Profit and loss according to the balance-sheet
Total (VI+VII+VIII+IX+X+G)

Income
         13. Net domestic sales
         14. Net external sales
XI. Sales revenue (13+14)
         15. Increase in self-manufactured inventories
         16. Own work capitalized
XII. Capitalized value of self output (15+16)
XIII. Other income
      From this: reversal of depreciation
XIV. Earnings from operations (XI+XII+XIII)
H. Losses from operations (VI>XIV)

         17. Income from investments
             From this: from joint venture



                                                         20
         18. Exchange profit of sale o shares and participations
             From this: from joint venture
         19. Interest and exchange profit on financial assets and investments
             From this: from joint venture
         20. Other interest receivables and similar income
             From this: from joint venture
         21. Other earnings from financial activities
             From this: valuation margin
XV. Earnings from financial activities (17+18+19+20+21)
I. Losses on financial activities (VII>XV)

C. Earnings on ordinary activities (losses)[(A+B)<(H+I)]
VIII. Extraordinary expenses
D. Extraordinary result (loss) (VIII>XVI)
E. Earnings before taxation (loss)[(C+D)<(J+K)]
M. Earnings after taxation (loss) [(E-IX)<0] or [(L+IX)>0]
XVII. Use from the accumulated profit reserve for dividends and profit sharing
N. Profit and loss according to the balance-sheet (loss)

Total (XIV+XV+XVI+VII+N)




                                                       21
4. Appendix

                             Required breakdown of earnings report
                                    (Turnover cost method)

                                                  „A” version
          01. Net domestic sales
          02. Net external sales
I. Sales revenue (01+02)
          03. Direct cost of manufactured goods
          04. Purchasing cost of goods sold
          05. Cost of services sold
II. Direct cost of sales (03+04+05)
III. Gross earnings of sales (I-II)
          06. Cost of sales and trade
          07. Administrative costs
          08. Other general costs
IV. Indirect cost of sales (06+07+08)
V. Other earnings
    From this: reversal of depreciation
VI. Other expenses
     From this: depreciation
A. Earnings from operations (+III-IV+V-VI)

  The following lines are implicitly similar with the respective lines in the 2. Appendix „A” version between
lines 13-23, VIII-XII., and B-G.



                             Required breakdown of earnings report
                                    (Turnover cost method)
                                                  „B” version
Expenses
          01. Accounted direct cost of sales
          02. Purchasing cost of goods sold
          03. Cost of services sold
I. Direct cost of sales (01+02+03)
          04. Cost of sales and trade
          05. Administrative costs
          06. Other general costs
II. Indirect cost of sales (04+05+06)
III. Other expenses
     From this: depreciation
IV. Expenses on operations (I+II+III)
A. Earnings from operations (IV<XI)

 The following lines of expenses are implicitly similar with the respective lines in the 2. Appendix „B” version
between lines 09-12, VII-X., and B-G.

Earnings
         11. Net domestic sales
         12. Net external sales
IX. Sales revenue (11+12)
X. Other revenue
   From this: reversal of depreciation



                                                       22
XI. Earnings from operations (IX+X)
H. Losses on operations (IV>XI)

  The following lines of earnings are implicitly similar with the respective lines in the 2. Appendix „B” version
between lines 17-21, XV-XVII., and I-N.




                                                       23
5. Appendix
                                             Simplified report

                       Required breakdown of simplified balance-sheet
Assets:
A. Long-term assets
          I. Intangibles
          II. Tangibles
          III. Financial assets
B. Current assets
          I. Inventories
          II. Receivables
              From this: receivables due to cash outflow
                          receivables not related to cash flow
          III. Securities
          IV. Cash
Liabilities:
C. Equity
          I. Issued capital
          II. Capital reserves
          III. Accumulated profit reserve
          IV. Engrossed reserves
          V. Profit and loss according to simplified balance-sheet
D. Reserves
E. Special reserves
F. Liabilities
          I. Long-term liabilities
          II. Short-term liabilities
              From this: liabilities due to cash outflow
                          Liabilities not related to cash flow



                                  Required breakdown of earnings
A. Final cash revenue, settled income (III+IV)
         1. Financially settled net sales revenue
         2. Financially settled other net sales revenue before tax
I. Cash revenue before tax (1+2)
         3. Sales revenue compensated not by cash
         4. Other sales revenue compensated not by cash
II. Revenue without cash flow before taxation (3+4)
III. Revenue before tax (I+II)
         5. Revenue with cash flow, free of income tax obligation
         6. Revenue without cash flow, free of income tax obligation
IV. Revenue free of income tax obligation (5+6)
B. Final cash outgoings, settled expenditure (VIII+IX)
         7. Cost of materials and purchasing cost of goods
         8. Personnel-type expenses
         9. Other production costs and expenses
V. Outgoings provable as expenditures (7+8+9)
         10. Non investments related acquisitions, settled not in cash
         11. Fringe benefit for employee and members
         12. Expenses compensated not in cash
VI. Expenditures related to changes in assets (10+11+12)
         13. Amortization
         14. Depreciation
         15. Change in purchased and paid inventories +



                                                        24
VII. Settlements indicating expenditures (13+14+15)
VIII. Total expenditure (V+VI+VII)
          16. Outgoings on investments
          17. Other outgoings
IX. Outgoings not exercisable as expenditures in income taxation (16+17)
C. Earnings from financial activities before taxation in the subject year (I-V)
D. Changes of earnings from financial activities free of income taxation in the subject year (5-IX)
E. Change of earnings from financial activities in the subject year (+C+D)
F. Earnings realized not in cash (II+6-VI-VII)
G. Earnings before taxation (C+F-6)=(III-VIII)
          18. Corporate tax payable
H. Earnings after taxation (G-18)
          19. Approved dividends
I. Profit and loss according to the simplified balance-sheet (H-19)




                                                       25
6. Appendix

                                                                       INVOICE                 Number:    X      11335577

                                                                               Name and address of
         Name and address of issuer:                                           buyer:




         Tax registration number
         Community tax number:
         Method of
         payment:                                 Date of compliance:          Date of issue:             Deadline of payment


                                                              The product or service
              Title (prod., serv. )   Quantity.   Quantity.      Unit price        Value         VAT          VAT             Value

          Registration number           unit                   (without VAT)   (without VAT)      rate        value           VAT




         Value of product and service:
                                                              Tax basis                        Tax rate   Tax         Total




                                                              Total:


         Original 1. copy                                                      Issuer:




                                                                         26
7. Appendix


         Cash payment invoice                                 Number     Y 00997755
         Name and address of issuer:                          Name of buyer




         Tax registration number                              Tax registration number

                                                              Community tax
         Community tax number:                                number:                   Date of issue:


                                     The product or service
                                                                                        value,
              Registration number   quantity                  quantity    Unit cost     which……..%
               title                unit                                 VAT incl.      VAT incl.




         Original 1.
         copy                                                 Total sum

                                                              % value of tax
                                                              devolved




                                                       27
8. Appendix



                  Place of stamp                 INCOME CASH RECORD                     Number: B 4545454
                                                                                        Date:
    ……………………………………………………………………………………….                                                  paid on behalf of
                  …………………..         Ft, i.e. ……………………………………………………………………………forint
    Forint shall be paid by the following
     Cash turnover         Ledger                Text                                           Sum
                         account
       Legal title     number




    Cashier                         Remitter:                  Annex
                                                               ………..p          Total:
    Controller:                     Signature of payer of the account




9. Appendix

    Place of stamp                               EXPENSE CASH RECORD                    Number: K 9898989
                                                                                        Date:
    The cashier shall pay by the following to:………………………………………………………………….
    ……………………….Ft, i.e. ……………………………….…………………………………………..forint


      Cash turnover.       Ledger                Text                                   Sum
                         Account
    Legal title         number




    Cahier:                         Remitter:                 Annex
                                                              ………..p           Total:
    Controller:                     Signature of the receiver of the amount:




                                                                28
10. Appendix

                  CERTIFICATE OF RECEIPT
         Name, address, and bank account                         Name, address, and bank account number
         number of issuer:                                       of customer:




         Delivered from……..…………store
                      BILL OF DELIVERY                           Number:
                                                                            XY 44668800
         Number , date and name of task                          Name and address of
         manager of the order                                    recipient


         Number:
         Number    Registration number and   VAT     Quantity    Quantity    unit price   Value
                   title of the product ,                                                 VAT incl./VAT not
                   service                   rate    unit                                 incl.




                                                                                          Verification of
         Date                                Notes at acceptance                          acceptance
         Signature of issuer




                                                            29
Resources:
   -   2000. évi C. törvény a számvitelről
   -   1995. évi CXVII. törvény a személyi jövedelemadóról
   -   Dr. Urfi Péter: Számvitel gyakorlatok 2001.
   -   Korom Erik – Veress Attila: Bevezetés a számvitelbe 2004.
   -   Dr. Gál Jolán: Pénzügyi számvitel 2006.
   -   Reizingerné Ducsai Anita – Dr. Vörös Miklós: Könyvviteli alapismeretek 2002.
   -   Dr. Sztanó Imre – Dr. Vörös Miklós: Számviteli alapismeretek 2001.
   -   Szűcs Imre: Számviteli alapismeretek 2006.




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posted:4/5/2013
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