Journal entry: nothing is recorded in only one place
Double entry is five hundred years old and still the best idea in accounting: every movement is recorded twice, and the two sides have to add up to the same amount.
The entry that records an economic event in the journal, split between debit and credit accounts for the same amount.
The Código de Comercio requires every business to keep orderly accounts. Its article 25 pins down the books: the book of inventories and annual accounts and the journal. The journal records every transaction, day by day.
The books are legalised electronically at the Registro Mercantil within four months of the year-end (article 27). For a year ending 31 December, before 30 April.
A sales entry, read out
An invoice for €1,000 of base plus €210 of VAT:
- Debit · (430) Clientes ....... 1,210.00
- Credit · (700) Ventas de mercaderías ....... 1,000.00
- Credit · (477) Hacienda Pública, IVA repercutido ....... 210.00
It reads like this: the client owes me €1,210, of which €1,000 is my income and €210 belongs to Hacienda. The VAT charged never passes through an income account.
And the payment, afterwards
- Debit · (572) Bancos ....... 1,210.00
- Credit · (430) Clientes ....... 1,210.00
Two entries, two moments. That is the difference between invoicing and being paid, told in accounting.
The mistake that comes up most
Making a single entry that mixes the sale and the payment. Once they are merged, the trade receivables balance disappears and with it the information about what is outstanding. Reconciliation stops being possible.
Where this carries on in Cairos: Accounting, without the fluff.
Terms that go with this one
Almost no tax concept makes sense on its own. These three are the ones that most often turn up beside it.
Plan General Contable
The rules that set out, in Spain, the accounting recognition and measurement criteria, the annual accounts formats and the chart of accounts.
AccountingRecord book
The compulsory record, in date order, of the invoices issued and received, which underpins the self-assessments and the annual summaries.
Payments and bankingBank reconciliation
The process of reconciling the balance on the bank statement with the accounting balance of the current account, identifying every difference.
This, handled without thinking about it
Cairos keeps the invoices, the record books and Hacienda's forms from the same data, so the theory on this page turns into boxes that are already filled in.
No card and no minimum term.