What are third-party accounts?

In accounting, the accounts of third parties are in fact all the accounts of class 4 of PCG that is to say of the General Accounting Plan. For best accountancy training Best school of accountancy In Pakistan. Back on these accounts and their usefulness in accounting.

This is an account belonging to class 4 of the PCG. To make this clear, this account has a number that begins with the number 4. The accounts of third parties belongs to the balance sheet accounts, and summarizes in a synthetic way all the interlocutors of the company . As soon as the company maintains relations with suppliers, customers, employees, social agencies, partners or the administration, the latter must necessarily appear in the accounts of third parties.

What is the account of third parties?

Third party accounts allow you to have a perfect visibility of all the transactions that come or go to the interlocutor. We will be able to note the advances and the installments of the orders, or the purchases and the assets, for the suppliers. For customers, it is possible to know the sales, the advances, the advances or the depreciations of the receivables. For employees, it will show all the remunerations or the participations in the result. For the administrations obviously will appear VAT due or credit, and all taxes as well as expenses for example.

When all the transactions linking the company to the interlocutors have been integrated into the accounts of third parties, lettering is carried out, that is, each invoice must be reconciled with its payment in order to justify the balance of the accounts. This is usually done when the accounts are reviewed.

The accounts of third parties are therefore balance sheet accounts beginning with the number 4, and being the subject of lettering. This is an extremely important accounting manipulation for a company.