ACCOUNTING BOOKS

Accounting books are the documents that support and reflect the facts with significance in the economic reality of the company over a period of time. Commercial law establishes which accounting books are mandatory for companies. The main accounting books are:

1. Journal

The journal is the main accounting book, where all the operations of business economic activity are recorded, in chronological order, as they occur over time. The annotation of an economic fact in the daily book Is called a "seat". Each entry must reflect the information referred to a complete economic event and must be composed of at least two notes or annotations in two different accounts. Seats by definition must be square, which means that the sum of the amounts entered in a seat in the must be equal to the amounts noted in the bearing of that same seat. The fact that a seat is square indicates that all the consequences of the economic fact have been taken into account.

2. Ledger

This book collects the information already included in the journal, but reordered by accounts, in it are collected for each account, according to the principle of double entry, all charges and credits made in them and is easier to carry.

3. Inventory or balance sheet book

Balance sheets reflect the status of the company's assets on a given date. Balances are created when we have passed the amounts from the accounts of the seats to your general ledger.

4. Financial statements or annual accounts

Although each country regulates the mandatory content of financial statements, it is usually made up of the following elements:

• The balance sheet (also called the statement of financial position or statement of financial position). The balance sheet reflects the assets of the company on a certain date. • The income statement (also called the profit and loss account) expressly and in an orderly manner, details the profits or losses of the company during a fiscal year. • The statement of changes in equity (statement of changes in equity), provides information on the amount of equity. • The cash flow statement. • Memory (also called supplementary information or notes). The report expands and details the information contained in the previous documents.