Financial Education - Accounting statements as a tool to represent the financial situation of an organization

The financial statements are recorded in the journal, which is a subsidiary ledger in which sales are recorded in a chronological, orderly and detailed manner, allowing the financial situation of an organization to be represented.

Financial statements are a structured financial representation of the financial position and transactions carried out by the company. The objective of financial statements, for general information purposes, is to provide information about financial position and performance, as well as cash flows, that is useful to a wide range of users in making economic decisions.

In summary, financial statements are documents that contain detailed financial information of an organization, with the purpose of knowing the stability of the companies, the relationship between assets, liabilities, equity, income, expenses and cash flow, which show the real situation of the organizations.

The objective of the financial statements of a small or medium-sized entity is to provide information on the financial position, performance and cash flows of the entity that is useful for economic decision-making by a wide range of financial statement users who are not in a position to demand reports tailored to their specific information needs.

In other words, the objective of financial statements is to provide the necessary information on the financial position of an organization, explaining in detail the revenues, expenses, assets, liabilities and capital.