What does the financial statement consist of?

What does the financial statement consist of?

A financial statement is a structured financial report. used to show the financial status of the business issuance of financial statements It is an important part of the account. In the financial statements It consists of 5 important statements, namely:

1. Statement of financial position or balance sheet

by looking at assets, liabilities and owner's capital

2. Income Statement

By looking at the total income that profit or loss And can tell the expenses that are costs such as management fees, interest, taxes, etc.

3. Statement showing changes in equity

Look at the changes in capital, such as capital increase (profit) or capital decrease (loss).

4. Cash Flow Statement

Able to tell the source of money used in various operations of the business, which can be divided into 3 types as follows

- Investments such as putting money into various investments

- Operations such as knowing the amount of in-out

- Procurement, e.g. from borrowing (debt) from the owner (capital), makes known the source of money. therefore able to assess the risks of the company

5. Notes to financial statements

It is an additional remark from the 4 financial statements mentioned above. including the criteria for preparing the budget or other accounting policies

🔸 Perpetual Inventory System

will use the inventory account To record the movement of goods throughout the operation, such as buying, selling, returning, receiving, etc., by recording the value of the amount. Thus making it possible to know the balance of the product at all times. Suitable for businesses that sell expensive products or there are not many products

🔸Recording inventories at the end of the period (Periodic Inventory System)

will not be recorded in the inventory account In which the inventories must be counted and appraised. On the day you want to know the balance But if wanting to know the cost of sales, it has to be calculated again to know. Suitable for businesses that sell products in large quantities such as department stores, etc.

In this regard, the recording of goods by various methods mentioned above It is for the convenience of accounting records. that can be used according to the suitability of the business

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