The concept of economic activity
Economic activity is any activity of the enterprise that is associated with the sale of goods, services and profit maximization.
Economic activity involves a complex economic processes, such as:
1. The use of the means of production. Under the means of production refers to fixed assets, depreciation, miscellaneous equipment, that is, objects that are directly involved in the process of making a profit.
2. Using objects of labor. The items include materials. Their consumption should be economical and regulated, then it will positively affect the financial result.
3. The use of labor resources; work resources are: availability of skilled labor, optimal use of working time and payroll.
4. The production and marketing of products; Here we consider the indicators of production quality, deadlines, volume of shipment, cost of the products.
5. Indicators of cost of production. Are taken into account all costs incurred in the production and sale of products.
6. The profitability indicators. Qualitative indicators of the outcome of the enterprise.
7. The financial condition of the company.
8. Other business processes.
All of these indicators are included in the concept of business enterprises and are in constant close connection and dependence, therefore, require periodic analysis and accounting.
Fixing the facts of economic activities
Most enterprises carry out their functions with the purpose of earning income. For smooth operation of all departments within a company require constant monitoring. It is necessary to conduct continuous work with documents which reflect data on all business transactions.
It is important to analyze the economic activity of the enterprise for constant monitoring on these processes. Economic activity is reflected in accounting registers and vaults:
- analysis of accounts;
- trial balance;
The main report of any company is the balance sheet. According to this document, a knowledgeable person can immediately perform the economic condition of the firm. None of the transactions made in the ordinary course of business does not pass by itself, all actions are recorded in registers and are included in the reporting, analysis and forecasting.