1. Inventory settlements

2. Define inventory settlements.
This action and the end of the accounting period
Financial, to find out the correct and accurate values for assets and liabilities
As well as revenues and expenses, in order to reach the result of the work of the project of profit or loss and financial position statement of work restrictions.

3. The importance of inventory settlements
The primary goal of business inventory settlements is to apply a set of rules and basic accounting principles, the most important of which is called accrual basis and that the process must be recorded in the financial period in which they occur, regardless of the amount seized or payment, so when revenues must be registered regardless of whether or not received as well as the recording of expenses when they occur, irrespective of paid or not.

4. Accrual basis is accepted and used in accounting while only using cash basis on rare cases The need for periodic accounting reports required to deal with accounting hypothesis called project life (Division hypothesisThis differs from the cash basis which provides that financial operation must be recorded when received or paid (i.e. when an arrest or pay) and therefore must be income when received and also must register when you pay expenses too.Accrual basis is accepted and used in accounting while only using cash basis on rare cases The need for periodic accounting reports required to deal with accounting hypothesis called project life (Division hypothesis

5. Since the life of the project and its unlimited continues to be split
The life of the project to the periodic financial periods, and often financial year,
Until you get the result of the work of the project and its financial center each year separately, this is achieved through the application of accrual basis which includes the principle of expenditure and income interview the principle achieved revenue.

6. MATCHING PRINCIPLE
This principle stipulates that it must bear the financial period all expenses incurred to obtain revenue for that period no more and no less than the costs borne by the facility must be recognized as an expense or expenditure in the same period in which the recognition of revenue from goods and services resulting from this.

7. REVENUE RECOGNITION PRINCIPLE
This principle stipulates that registration of revenue when earned when providing the service or sale of the goods and not when cash's fist.
To achieve these principles the accountants at the end of each financial period preparation
Limitations of inventory settlements

8. When the inventory settlementsر
Inventory settlements are usually at the end of the financial period, which vary between facilities, it can be months or three or six, often years, bearing in mind that the financial year might not necessarily be the same Gregorian year (which begins on 1 January and ending on 31/12 financial year will vary depending on the nature of the business it can start its work in any business day of the calendar year.

9. Settlement expenses
It is intended to review project expenses during the financial period to ensure that it has been downloaded income account of expenses incurred to obtain revenue for that period
No more, no less.
Expense processing can be divided into two types: :

10. PREPAID EXPENSES
Prepaid expenses account appears when project expenses paid in advance, and be part of the next period, when the settlement process prepaid expenses should be excluded and not charged to the current financial period in accordance with the principle of an income expenditure.

11. ACCRUED EXPENSES
The expenditure for the current financial period but not paid, and did not appear at the end of the current period within the balance of the expenses must be accounted for and downloaded to account for the current period and in accordance with the principle of an income expenditure.

12. Settlement income
Intended to make the income account is credited to income for the financial period, regardless of whether or not it has received income during the period
Income can be divided into two parts:

13. First: unearned revenues
The revenue obtained during the financial period in advance before providing service to customers and emerged at the end of the period within the revenue balance acceptable in advance in the trial balance is for future periods

14. Second accured revenues
The revenue for the fiscal period but not yet received or recorded in the books yet, it did not appear at the end of the financial period under review balance income balance so it has to be proven.

15. The settlement of fixed assets (consumption)
Fixed assets: means the assets purchased by the owner of the facility for use in everyday work and is not for resale and profit such as buildings, machinery, equipment and furniture.
Carrying value of fixed assets gradually as a result of use and time limitation must settle value at the end of each financial period by calculating the so-called consumption, which is the cost of the asset allocation or distribution of a recipient of services accounting periods in accordance with the principle of origin meet revenue expenditures.

16. Factors that determine the premium:
1) fixed asset cost:
Include all expenses incurred by the facility for fixed asset and place it in the space provided
To set up ready for actual use, either through purchase or manufacture, plus any expenses to increase production capacity or efficiency or age.

17. 2) the useful life of the asset:
Intended to determine the number of productive years for fixed asset where the original treaty benefits or services
0……………………………………….. .
3) salvage value:
Is the expected amount obtained when dispensing a fixed asset at the end of the productive life or when it becomes unusable. One of the most common ways to account for fixed assets is the straight-line method.

18. Straight-line method:
One of the methods used in the calculation of consumption of fixed assets, and assumes equal services learned in each period of the useful life of the asset, and it would be equal to the consumption expenses of all useful life periods. This method is easily calculated premium and achieve equitable distribution of consumption of some fixed assets. The premium is determined by dividing the fixed consumption consumption excluding asset salvage value to the number of years of useful life of the fixed asset (the expendables) as follows:
Premium annual depreciation = fixed asset cost – salvage
value
The useful life of the asset