INTEREST-FREE BANK ACCOUNTING AND OPERATION
Dr. Ali Erişen
SUMMARY
Determining economic values, what they are, who they belong to and where they are located is defined as accounting, and based on the fact that people are creditors and debtors, it is first explained who the account holders are.
Then, two other features of receivable and payable accounts, namely escrow-deposit and time-demand, are defined and the account types are listed.
Finally, accounting types are mentioned based on the basic classification of economic values.
Accounting can be defined as determining the values to be owned, what they are, who they belong to and where they are located.
Topluluk hayatı, bazı değerleri topluluğun ortak değeri haline getirirken, bireylerin ve tüzel kişilerin veya ekonomik kişilik taşıyanların, karşılıklı olarak sahip oldukları haklar «zimmet» kavramıyla ifade edilen anlamı taşıyagelmişlerdir. Diğer bir deyişle genel olarak, ekonomik bir değeri beraberinde taşıyanla, bu değeri hak eden veya ona sahip olan kimse farklı kimseler olabilmektedir. Buna yönelik bir durum tesbitinin yapılması, topluluk muhasebesinin temelini teşkil eder.
Instead of collecting goods and cash in a center and distributing them as loans, the interest-free bank will work by knowing who and where the goods and cash are and giving instructions to the relevant people, through a central accounting to be established based on the concept of embezzlement mentioned above. Interest-free bank will also operate as an economic personality. He will be the guarantor for all debts and receivables of the carriers as much as notified to him. This guarantee requires that the damages arising from the accounting error be compensated, which will be resolved in the way that those who will apply the accounting system will compensate for this damage on the basis of solidarity among themselves.
Dayanışma esası, ancak, zararın ortaya çıkmasıdurumunda ortaklar arasında paylaşılmasını öngören, aidatsız bir sigorta sistemi olarak da düşünülebilir. Yine, kişilerin muhasebelerinin, bu yaygın muhasebe sistemi ile tutulmuş olması, kendilerinin bu zorluktan kurtarılması ve dolayısıyle ekonomik sirkülasyona olan katkılarının arttırılması amacını da beraberinde getirmiş olacaktır.
Based on these basic explanations, bank accounting must determine the relationship between account holders, their different accounts and the economic values owned. In this respect, firstly the account holders, then what different accounts can be, and finally the relationships that may arise between economic values will be discussed.
I — ACCOUNT HOLDERS
Account holders can be grouped into four main groups:
1-Persons,
2-Site Units,
3-Partnerships,
4-Commodity Communities.
The following explanations can be made regarding these.
1— People
In addition to the fact that people cannot own people and things cannot own things, it is also possible for people to own things and individuals and communities undertake certain services to each other and a right arises in this respect.
Due to the emergence of such rights for individuals and the fact that each person has a personality, an account is opened for each person in his/her name and an account number is given to him/her in his/her relations with the bank. This account number will be processed in all kinds of records with all debts and receivables belonging to the person, and will also bring the freedom to make transactions in all bank branches with the same account number. Additionally, people will be given a ledger or wallet showing their accounts.
2— Space Units
Similar to how people are connected to bank accounting with an account number, different types of goods, or "goods" as they are generally known, must also be entered into accounts. In terms of having an account, the location units in which the goods are located are taken as basis, an account is opened for these locations and an account number is given. In terms of accounting, the place where the goods are located will be shown as the debtor, and the owner of the goods will be shown as the creditor. In terms of general meaning, it is essential that all movable values, except promissory notes and cash, are debited to space units.
The goods found in any place are handed over to the "trustee" of that place, and "guards" are assigned to protect them. Except for the accounting record, any damage or loss to the goods will be covered by the solidarity partnership that includes the trustees and guards. In terms of the accounting record of a place, if the information in the books or cards showing the goods that should be there does not match the amount of goods available, the trustee of that place will be responsible. The penalty is that his driving license is revoked.
It is also noteworthy that in the solidarity partnership, while the damage is borne by the partners, an auto-control is provided in the form of removing the person causing the damage from the partnership.
3— Partnerships
Partnerships established by many people will be treated as a single person's account in accounting, that is, they will be represented by an account number due to their personality.
Some of the partnerships that will be processed in accounting will be accounted as "legal entities" and as real persons, according to the current legislation. Other partnerships will be represented in bank accounting through a responsible partner, with the status of "ordinary partnerships". These ordinary partnerships will be able to obtain a bank account number after they have prepared their contracts, determined their responsible partner and provided general services to one of the legal entities that are the founders of the bank.
Just as disputes between partners within any ordinary partnership will be resolved by the bank's "arbitration institution", disputes arising between ordinary partnerships will also be resolved by the same arbitration institution.
4— Commodity Communities
According to a certain evaluation, many different goods are combined to form a group of goods to be evaluated as a single good. As a result of this combination, a promissory note is issued to represent the property group. An account number is given to this bill and as the goods represented by this bill enter the warehouse, the bill is released to the market. The movement of this bill means the movement of the corresponding goods. In addition, all enterprises will have such bills unique to them, representing the goods they produce or use in production.
If the purchasing power of the bill increases during its movement in the market, that is, if the goods sold with this bill become cheaper, the public will be in demand for the bill. Thus, for the business, although the amount of bills issued to the market does not increase, the stock level of goods in its warehouse will increase. This situation is the result of profitability. In case of loss, these issues will develop in reverse. In the light of this analysis, the fair value of the bills will be determined according to the stock level in the warehouse, and the fair value of the bill will show the profitability of the company that puts that bill on the market. In addition, the current prices of the bills must be determined every week. In order to achieve this, it will be essential for the bank accounting to know the stock level in the central warehouse and the amount of promissory notes held by those who hold the promissory notes. Detailed information regarding bills will be given later in bill accounting.
II - ACCOUNT TYPES
In general terms, the benefit of keeping accounting in various aspects to the community can be summarized as being able to follow up all kinds of economic relations between members of the community on paper. In order to achieve this general purpose, all economic relations between individuals must be known in accounting. Such a declaration and knowing the "location" and "amounts" of the values that can be utilized based on it will enable the relations to develop in a healthier way.
As stated in the above paragraph, individuals or groups can participate in the interest-free banking institution by declaring the economic values they have, meaning that they can be referred to in case of need, or by putting certain items they own in a common place for the benefit of the community and transferring the assets they own to them later. You can also participate by handing it to the bank warehouse for use when necessary and for someone else who needs it at that moment to evaluate it.
Just as it is necessary to know in accounting the declaration of a value owned, the placing of the goods in a common place and the delivery of the goods to the warehouse, the purpose of the relations between individuals, who are the individuals authorized to dispose of the value subject to the economic relationship, and finally the increase and decrease that will occur on the value. It will be necessary to know who will bear the losses.
1 - Escrow and Debit Accounts
Based on the above-mentioned need, the basic principle guiding bank accounting can be put forward as follows: In addition to the fact that all kinds of account holders (individuals, partnerships, space units and promissory notes) can be debtors or creditors, the change in value that will occur in a 'entrusted' value belongs to the creditor of that value. The remaining half of this basic point can be completed as follows: Increases and decreases in a value given as "Deyn" will belong to the debtor of that value. The other basic principle accepted in terms of who will belong to the change in value can be summarized as "to whomever the increases belong, the decreases belong to him" and this also constitutes one of the cornerstones of the interest-free system. Thus, escrow and debenture accounts will need to be opened for each creditor and debtor.
Emanet olarak verilen bir değerin tasarrufuna, yine yukarıdaki açıklamaya dayalı olarak, o değerin alacaklısının ve deyn olarak verilen bir değerin tasarrufuna ise o değerin borçlusunun yetkili olacağı tabii olarak ortaya çıkmaktadır.
Another point that needs to be mentioned is that what is meant by the term "value change" is economic. In addition to economic increases and decreases, it should also be determined who will bear the legal decreases that may arise. This will belong to those who are responsible for protecting the legal status. That is, in turn, the trustees and the guardians themselves, the solidarity partnerships they are in, and the interest-free bank itself.
2 - Current and Current Accounts
After determining whether any debt or receivable is escrow or debit, the second point that needs to be determined is whether the accounts are "current" or "demand", depending on whether the receivable is requested immediately or not. This point is at least as important as the feature of trust and trust. It can be said that there are two basic features that direct bank accounting, and these are the "deposit-deposit" and "demand-demand" characteristics of debit and receivable accounts.
Whether a creditor demands his receivable immediately or not is important in terms of the debtor's ability to evaluate the value he received as a loan in the economic environment. A situation in which the debtor can benefit only arises if the debt is mature. Based on this fact, one of the important services of the interest-free bank will be to convert demand receivables into term debts. The demand creditor situation occurs when many people lend money to the bank, meaning a loan; The term debt situation is possible when the bank lends money to those in need, again in terms of loans, and thus economic dynamism arises. This circulation, for the bank, is determined by the status of "Demand borrowing" and "Term lending". The bank can only realize such an economic event by making due diligence, which we call accounting, and through its guarantee. The basic function of the interest-free bank for the development of the community is thus, is determined once again.
In the interest-free banking system, the word "maturity" does not indicate a date on which the debt must be paid. Instead, it either specifies the date on which the receivable will be claimed and you will not be obliged to pay unless it is claimed; or, it specifies a condition under which the debtor's credit volume will be reduced if the debt is requested and not paid or delayed. However, at the end of the period, enforcement action may be taken against the debtor if the credit limit is exceeded. Thus, instead of having a feature that is tied to history, "maturity" has a feature that emerges as a "condition".
Considering escrow-demand and current-demand accounts; There will be four accounts for each debit and receivable, which means there will be eight types of accounts for each account holder.
If we list these accounts;
VE: Term Escrow Debit and Receivable
E: Current Escrow Debit and Receivable
D: Demand Debit and Receivable
VD: Term Debit and Credit.
III — TYPES OF ACCOUNTING
Based on the basic concepts of receivable and debt, creditors and debtors are classified under the title of "account holders", as well as receivable and payable accounts depending on the nature of the credit and debt relationship between the account holders (things-place, things-person and person-person). It had a grouping under the title of "account types": Now, based on a basic classification of economic values subject to receivables and debts, it will be discussed how they will be recorded in accounting. In this distinction, the accounting of that value will emerge for each value.
The basic classification and therefore the relevant accounting of economic values, depending on their characteristics and the currency in which they are valued, can be made as follows:
-Real estate accounting
- Labor accounting
--Goods accounting
-Nakit muhasebesi
-Note accounting.
These are examined separately below due to their importance.
1— Real Estate Accounting
The main features of immovable properties are that they cannot be transported and do not run out of use. Based on these and because of the high values they carry, the movement in their purchase and sale behaves unlike other goods. They are traded at high prices in periods of prosperity and at low prices in times of crisis. Immovable properties are priced with Land Certificates, that is, they are bought and sold.
In terms of accounting, there are two separate periods such as the construction and use of real estate. Land, general service, material and labor expenses spent during the construction period must be recorded in the accounting of that real estate. During the period of use, the rents, repair and maintenance expenses, and general services provided must also appear in the accounting of that real estate. Since immovable properties do not decrease with use, they are free to be rented.
2 — Labor Accounting
Since employees are personally involved in production and construction, their economic situation may arise as they are subject to a different status within the entire accounting system. The efforts of employees are evaluated in proportion to the work they do.
Employee rations can occur in four ways. They receive a fee, some of which is determined proportionally over time. The other part receives a specified amount per piece as a lump sum upon delivery of the piece. Another part of them earns a share of the generated revenue by working and participating in the partnership. The last form of remuneration is realized by receiving a share from the general service, and the employee receives his right from the general net income in proportion to his work, regardless of the turnover of the business. This last form of earning, from another perspective, means participating in profits, and sometimes one can have a share of general income without working at all.
Employees will receive one of the basic bills included in the bank accounting as wages. These are land bond, iron bond, wheat bond and gold bond.
3 - Goods Accounting
The basis of the economy is man and his need for goods. Other values gain value because they help people produce the goods they will use. When goods are mentioned, "movable goods" and especially "consumer goods" are understood. The goods used in the construction of real estate are known as "materials". In addition, although immovable properties can be rented, movable properties cannot be rented due to possible losses.
The accounting to be kept for consumer goods and construction materials will also be different. While knowing the quantities of movable goods and who they belong to is known as "warehouse accounting", determining the values of the materials spent on immovable properties is called "cost accounting".
In the interest-free system, finding out the costs of movable goods does not require lengthy records and evaluations. Because, in this system, the values of movable goods are not determined when they are produced. There are inputs during production and they get a share of the revenue. When these shares are sold by their owners, their input values may have been calculated. Based on this, cost accounting of movable goods loses its importance in the interest-free system and when goods accounting is mentioned, only "warehouse accounting" is understood. When we say cost accounting, we understand the determination of the values of the materials used in the construction of real estate.
The basic feature of accounting is that knowing the quantities of goods delivered to the warehouse in any production area and by whom they were delivered, based on the principle of "everyone writes down what they give and receive and reports this to the accounting office with a document", constitutes the basis of goods accounting. In this way, calculations will be made for creditors and debtors by taking into account the operating bill price of the previous period, and the operating bill prices of the goods to be produced in the next period will be determined with the current goods stock level. Determining the price according to the stock level will create the production balance, including the division of labor.
In any production area, a business certificate belonging to that branch of production will be given in return for the goods produced. While the price of the operating bill is determined by the amount of warehouse stock, the operating bills of standard production goods will be circulated with the wheat bill.
The goods in any warehouse are entrusted there, they can be entrusted and deposited there, and any damages that may occur during their protection are covered by the solidarity partnership that includes the guards and trustees of that place. In addition, since the types and stock levels of goods in warehouses are kept in goods accounting on the basis of declaration, the warehouses to be consulted in cases of urgent need are known, based on the principle of crediting.
4 — Cash Accounting
When cash is mentioned, gold and silver are understood. The cash is in the hands of the individuals and any increase or decrease will be theirs. In other words, there is no trust for cash. All cash is processed in the deposit account. In this respect, it is different from mal. The feature of time and demand will also be included in cash accounting.
Similar to ensuring that the type and quantity of goods in a place is known in property accounting, the goal of cash accounting is to ensure that the cash in people's possession is known, based on their own statements. In this way, people's cash needs that arise at different times can be met by other people through "crediting". The cash amount declared by individuals will be accepted as the deposit of that person by the bank accounting and the credit volume of that deposit will be calculated.
5 — Bill Accounting
The basic function of the interest-free bank is to ensure the circulation of the issued bills by providing liquidity in order to price the four basic values mentioned above. Thus, while the exchange in kind is achieved through the movement of bills, without the physical movement of values; In the economic environment, immovable properties will be valued with "iron bills", labor with "land bills", consumer goods with "wheat bills", and cash with "gold and silver bills". In such a circulation environment, knowing the amounts and types of bills will be achieved by keeping bill accounting.
In today's sense, money entered the economy based on its feature of being a paper document to represent common goods used in in-kind exchange. Its difference from goods is that it has the feature of not being exhausted by use. With this approach, it functions like gold and silver. However, since it does not have the corresponding goods and debtors written on it, it has gained the feature of degenerating in the inflationary economy.
The essence of money is that it has the feature of being a promissory note. Interest-free bank, the definition of money mentioned above; It is redefined by putting into circulation the goods in return for which the debtor and guarantor are specified, but the creditor is not specified. With these points mentioned, it differs from the existing money. Thus, those who carry the four basic bonds mentioned on them will be able to take the value written on the note or convert it into other securities in the stock market and use it to have a different value.
Another feature of promissory notes is that, although gold and silver cannot be reproduced, they generally have to be brought into the economic environment by pledging immovable properties. That is, their reproducibility. The interest-free bank's issuance of bonds will be based on this principle. Thus, "land bills" were issued by pledging lands and ongoing constructions, "iron bills" were issued by pledging residences, "wheat bills" were issued by pledging facilities, "gold bills" were issued by pledging iron and wheat bills, and "silver bills" were issued to be balanced with the gold bills. can be done. While the silver bill means cash money and requires buying and selling other bills, the gold bill will be used in import and export transactions. The issuance of bonds does not mean that they will be put into circulation. These promissory notes, which are given to the relevant parties in the sense of credit, are put into circulation only when the equivalent written in the promissory note is physically revealed.
IV — COMMITMENT ACCOUNTING
The types of accounting described above are records aimed at determining the past and determining the current situation. In this respect, it is called "inventory accounting". However, accounting records, in addition to recording past events, are also required to indicate events that may arise in the future, based on agreements made. This feature reveals the need to specify such accounting as commitment accounting.
Commitment accounting, like inventory accounting, will consist of five basic accounting elements. In other words, while inventory accounts of real estate, labor, goods, cash and bills are kept, commitment accounts will also be kept.
The most important point to consider in commitment accounts is that when previously committed events occur, the commitment accounts are closed by establishing a connection with the relevant account.
FOOTNOTES;
[1]-author- Ali Erişen was born in Izmir in 1951. He completed his primary, secondary and higher education respectively in Izmir. In 1972, he graduated from Ege University Faculty of Engineering Sciences as a Mechanical Engineer. He completed his doctorate in 1978 and currently works as a faculty member at Dokuz Eylül University.