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A Financial Statement is a report which tells how the financial situation in
the company is at a specific time. It is usually made once a year. But you can
also make a financial statement every three month.
There are two main subjects in the report:
1. Profit and Loss Statement
The Profit and Loss statement tells about the earnings and spendings of the
company during the year. This means how much income has the company had from the
daily running of activities and how much has the company spent on the same
activities.
This part of the report tells whether the activities have been running as a
profitable business in the period or not. It is called the Profit and Loss
Statement.
2. Balance Statement
The other main statement in the report is the Balance Statement which shows
the actual value of the company as such. This means how much money is present in
the company in total when the value of buildings, tools, stock, money in the
bank account and in the cash box etc. is added.
It also shows how much the company owes to others. A company normally owes
money to suppliers, the bank and to the owner of the company.
Where does the statement come from
The statement reports are generated by your PC bookkeeping programme or your
accountant´s programme. The statement is generated from the vouchers entered in
the bookkeeping programme.
If you have entered all your vouchers correctly during the year, the
statements will give a true financial picture of your business.
To be able to read the statement you must know the elements in it.
- Go to next
business issue: The Profit and Loss Statement
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| awa jagne , Gambia |
26-01-2012 |
it is very good for student
| Marika Laidna, Estonia |
30-05-2011 |
I do not experiences on the subject
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