Accounting is an extremely important act for companies and companies to manage their finances. That is to say, that they have their account book up to date in order to determine in the state if there is a steady income or have losses. Within this process, the COA is a fundamental element, since it helps the entrepreneur or accountant to carry out their work. So, here we are going to expose the term and its function in a balance sheet.
Meaning of COA in accounting and finance
The acronym COA can have several meanings, since this is how several different titles are abbreviated, such as COA in SEMARNAT or coenzyme COA in biology. However, in accounting reference is made to a mandatory operation for every company. Therefore, it has to be carried out from time to time in order to demonstrate that fraud is not being committed.
Thus, the meaning of COA in finance is the name Confrontation of Self-Declared Operations. A process in which information is shared on a monthly basis with a government entity. Therefore, the public and private sectors have a connection, it is said moment.
Confrontation of Self-Declared Operations
The confrontation of Self-Declared Operations receives that name because it is a review process. In which everyone is studied the accounting movements of an entrepreneur, but that he himself must declare. In other words, the owner of the company has to write down his operations in a book and then present them to the governing body.
In other words, it is known as Confrontation of Self-Declared Operations to the entries that are written in the ledger. In which, each one of the detailed accounts is kept, the operations that were executed during the month. It is an organization that every company must have to demonstrate the income of money it has. In addition, this way you have a reliable record that puts everyone involved at ease.
In said account book, a general balance of the month is made. That is, a verification in which it is determined if it was good, lousy or average. Well, in accounting, the numbers emerge, so that it allows us to see if there are profits or if a financial stand-by has to be requested with which to pay the debts.
What is the COA used for in finance?
The function of the COA is the demonstration of the legality of the operations to a government entity. For example, in Peru, SUNAT is the one that handles COA issues and the one that brings to light the resolution of the Ministry. So, every month he sends a person in charge to review the balance sheet of a business.
Another function worth mentioning is that it allows you to know in detail all the accounting information. Well, the book has a set of lines called department. In this sense, in department 1 you should put any expenses incurred during the month, while in the next, only cash purchases come. At the end of the liability, it is passed to the assets of the company.
What is a balance sheet in accounting?
The balance sheet is what determines how a company’s numbers stack up. It is an evaluation or comparison of the main department of assets with that of liabilities. Therefore, the one who makes a contrast in the monthly expense and the entry of money in the same time range. There, by means of a simple sum, it is possible to know if profits or losses were obtained.
In the same way, in the information it is noted if more money is received in cash, by transfer, checks or with cards. The important is that income is higher than the discharge, but this will be determined by the number of sales that are made before the review of the state or balance sheet. Assets are the things that make money, what can be sold, while a liability is what is invested in.
Once the correction is complete, the envoy will emanate a judgment, in which he will issue a sentence. If there is a lot of waste without profit, the company could receive a debt alert.