Synthetic Accounting

Synthetic Accounting 

a summary in monetary terms of economically homogeneous assets and their sources and of transactions involving these assets. Synthetic accounts are kept by means of synthetic accounting records, for which a uniform plan is centrally approved.

Synthetic accounting is used to obtain overall information on the economic activities and finances of enterprises, institutions, and organizations; it is an invaluable means of verifying the interrelationship of all economic transactions. By comparing synthetic and analytic accounts, the completeness and accuracy of the recording of these transactions can be checked. The content of synthetic summary accounts is used to compile and verify reports.

In enterprises and associations, synthetic accounting helps ascertain the amount of fixed assets and of raw and other materials, as well as production outlays and the state of accounts with suppliers. In finance and credit institutions, synthetic accounting records and verifies adherence to the budget and to credit transactions.

Before a balance is drawn, consolidated balance sheets are compiled from analytic and synthetic accounts in order to verify the accuracy of the entries in the accounting records. Such sheets also summarize information on the sources and flow of assets and on the transactions involving these assets.