Essential Business Accounting: Financial Statements and Audits

Annual Accounts

• Balance Sheet: Reflects the equity, representing the resources available to the employer to carry out activities.
  • Profit and Loss Account: Measures the income generated by the business.
  • Statement of Changes in Equity: Collects the variation in the company's equity.
  • Cash Flow Statement: Reports on the origin and use of monetary assets, representing cash and cash equivalents classified by activity.
  • Notes to the Accounts: Expands the information collected in the annual accounts and contains additional details.

Corporate Social Responsibility and Audits

• Social Balance of the Company: A document that extends the study of the business's effects on its environment, determining direct or indirect impacts on public welfare.
• Audit: An analysis of a company's accounts and accounting process by an independent expert who issues a reasoned opinion. The expert opinion may take one of four forms: favorable, favorable with provisos, adverse, or a denial of opinion.

Accounting Theory and Management

Accounting Unit

The company's accounting unit is responsible for collecting and managing information, following guidelines designed to unify the meaning of accounting data so that it reflects the true image of the company's heritage.

Assets

The assets of a person or entity include all possessions, rights, and obligations:

• Goods: Industrial buildings, machinery, etc.
• Rights: Amounts due from customers.
• Duties: Liabilities such as bank loans or purchase debts.

Account Books

• Inventory and Annual Accounts Book: Includes the initial balance and the closing balance at the end of the year, along with the preparation of annual accounts.
• Journal: Records all daily operations relating to the company's activities.
• Minute Book: Reflects the resolutions adopted at general meetings and other corporate bodies.
• General Ledger: Not mandatory, but recommended; it organizes the entries made in the Journal by account to track individual balances.

Accounting Records

Accounts: Records that track changes experienced by an asset and disclose its status at a given date.