financial statements
Page 17 | Listen in audio
The financial statements are accounting documents that aim to present relevant information about the financial situation of a company. They are composed of three main reports: the Statement of Income for the Year (DRE), the Balance Sheet and the Statement of Cash Flows.
Financial Income Statement (DRE)
The DRE is a report that presents the financial result of the company in a given period. It shows earned income, expenses, and net profit or loss. It is important to highlight that the DRE is a dynamic document and must be updated periodically.
Balance Sheet
The Balance Sheet is a financial statement that presents the financial situation of the company at a given time. It is composed of two parts: the Active and the Passive. Assets represent the company's assets and rights, while Liabilities represent obligations and debts. The Balance Sheet is an important tool for assessing the company's solvency and its ability to pay.
Statement of Cash Flows
The Statement of Cash Flows is a report that shows the company's cash inflows and outflows over a given period. It is important to assess the company's ability to generate cash and to identify the cash flows that are related to operating, investing and financing activities.
In addition to these three main reports, financial statements may also include other relevant information, such as explanatory notes and analysis reports.
For the financial statements to be effective, it is important that they are prepared in accordance with current accounting and tax standards. In addition, it is essential that they are clear, objective and reliable, so that users can make decisions based on the information presented.
Now answer the exercise about the content:
_What is the financial statement that shows the company's cash inflows and outflows in a given period?
You are right! Congratulations, now go to the next page
You missed! Try again.
Next page of the Free Ebook:
18accounting books
3 minutes
Earn your Certificate for this Course for Free! by downloading the Cursa app and reading the ebook there. Available on Google Play or App Store!
