Cases in which it applies

The advantages of centralized accounting are easily obtained in its application to the medium and large companies, because it is absolutely necessary to resort to the division of administrative tasks, depending on the large number of operations that give rise to repeated annotations. The same concept, although they vary in their amount.

In this way, the system allows the separation of this type of frequent annotations by keeping independent records for them by different employees and completely independent of the central accounting, which only receives periodically the totals of those records.

Notwithstanding this, small companies can use even partial concepts of the centralized accounting system, even if they are used in some sectors that are duly biased in their activity, but where there are movements whose importance forces them to separate or separate them from his general accounting books.

Administrative Accounting

It is the information system serving the internal needs of the administration, with pragmatic orientation aimed at facilitating the administrative functions of planning to control as well as the decision making.

Financial Accounting

It is an information system that expresses in quantitative and monetary terms the transactions carried out by an economic entity, as well as certain economic events that affect it, in order to provide useful and safe information to external users of the organization.

Financial statements

Through financial accounting, the numerous and heterogeneous events that occur even in the most complicated businesses, are summarized in two brief states: the balance sheet and the income statement, which is a very important advantage. On the other hand, the financial statements of a running company cannot provide a complete or entirely accurate description of the business. It may be useful, at this point, to explore the true nature and limitations of these financial statements. In view of the variety of opinions supported by good reasoning, what follows should be considered as a stimulus for the formation of a criterion of its own and not as definitive opinions.