{"id":1001,"date":"2021-04-27T16:27:02","date_gmt":"2021-04-27T16:27:02","guid":{"rendered":"https:\/\/enorcerna.com\/wiki\/what-is\/financial-statements\/"},"modified":"2021-04-27T16:27:02","modified_gmt":"2021-04-27T16:27:02","slug":"financial-statements","status":"publish","type":"post","link":"https:\/\/enorcerna.com\/wiki\/what-is\/financial-statements\/","title":{"rendered":"financial statements"},"content":{"rendered":"
\n

What are financial statements?<\/h2>\n

Financial statements, also called accounting statements, are reports<\/strong> used by accounting to have a record of economic and financial activities<\/strong> that have been done over a specified period of time.<\/p>\n

These financial statements are used by owners, partners and creditors, <\/strong>who want to know exactly how their company is performing, to be aware of their financial situation.<\/p>\n

Characteristics of the financial statements<\/h2>\n

The main characteristics of the financial statements are the following:<\/p>\n

    \n
  • The information collected to calculate a financial statement may vary <\/strong>according to the patrimonial situation, the results, the evolution of the net worth, the cash flow, among others.<\/li>\n
  • The financial statements not only focus on the present of the company, but also provide information about the past and future of the organization<\/strong>.<\/li>\n
  • The content of the financial statement must be understandable,<\/strong> both for an accounting expert and for the rest of the managers of a company.<\/li>\n
  • Your information must be completely truthful and reliable<\/strong>.<\/li>\n
  • Although a current financial statement takes into account the past and future of a company, can be considered provisional,<\/strong> since over time it ceases to be useful.<\/li>\n
  • In order to be accountable to the State, the financial statements of a company they must be completely legal <\/strong>and be registered by different inspection institutions.<\/li>\n<\/ul>\n

    Types of financial statements<\/h2>\n

    There are various types of financial statements. These are detailed below.<\/p>\n

    Balance sheet<\/h3>\n

    The balance sheet, also called the statement of financial position, reflects the overall financial situation of an organization<\/strong> for a specified period.<\/p>\n

    Statement of income<\/h3>\n

    Also known as a profit and loss account, this financial statement exposes income and its relation to expenses and costs <\/strong>the organization has had, over a period of time.<\/p>\n

    This is used for know the earnings<\/strong> (profits) left to the organization, after recording all income and expenses.<\/p>\n

    Statements of changes in equity<\/h3>\n

    In this financial statement All income and expenses that cause a variation in the assets of an organization are reflected,<\/strong> for a specified period of time.<\/p>\n

    Cash flow statements<\/h3>\n

    The cash or cash flow statement shows the variations of money that an organization owns<\/strong> for a specified period of time. In short, it shows the income and expenses in cash<\/strong> of the organization.<\/p>\n

    Unlike the income statement, it does not focus on measuring the profit or loss of the organization in question, but rather the balance and how it is generated.<\/p>\n

    Fund movement statuses<\/h3>\n

    The statement of movement of funds, also known as the statement of change in financial situation, shows the use that the organization has made of the money generated<\/strong> over a period of time.<\/p>\n

    This financial statement exposes where the money was obtained<\/strong> owned by the organization and what has been done with it. <\/strong><\/p>\n

    Example of financial statements<\/h2>\n

    To better understand the concept of financial statement, let's look at the following example:<\/p>\n

    Below is the and<\/strong>Income statement of a computer consulting firm, corresponding to the year 2018:<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n <\/tr>\n\n\n\n\n\n\n <\/tr>\n\n
    IT Consultancy SA<\/th>\n<\/tr>\n<\/thead>\n
    Web development<\/td>\n$ 10000<\/td>\n<\/tr>\n
    advisory<\/td>\n$ 1000<\/td>\n<\/tr>\n
    Income<\/td>\n$ 11000<\/td>\n<\/tr>\n
    Salaries<\/td>\n$ 5000<\/td>\n<\/tr>\n
    Advertising<\/td>\n$ 500<\/td>\n<\/tr>\n
    Servers<\/td>\n$ 500<\/td>\n<\/tr>\n
    Total expenses<\/td>\n$ 6000<\/td>\n<\/tr>\n
    Profit (profit)<\/span><\/strong><\/td>\n$ 5000<\/span><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    In this financial statement you can see the income that the company has obtained<\/strong> for their services provided and, in turn, the cost<\/strong> you have had for the expenses necessary for the provision of services.<\/p>\n<\/div>\n\n\n

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    What are financial statements? Financial statements, also called accounting statements, are reports…<\/p>\n","protected":false},"author":1,"featured_media":1002,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1001","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-what-is"],"_links":{"self":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/1001","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/comments?post=1001"}],"version-history":[{"count":0,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/1001\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media\/1002"}],"wp:attachment":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media?parent=1001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/categories?post=1001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/tags?post=1001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}