As already presented in previous articles about the accounting terms. Accounting is called the language of business because it is a tool to deliver financial information to parties who need it. The better we understand the language, then the better our decisions, and the better we are in financial management. To convey such information, the accounting reports are used or what is known as financial report. The financial report of a company usually consist of four types of reports, namely the balance sheet, income report, report of capital changes and cash flow report.

Balance Sheet, is a systematic list of assets, debt and capital on a particular date, which is usually made at the end of the year. Referred to as a systematic list, because the balance sheet is based on a particular order. In the balance sheet can be known how many of the company’s assets, the company’s ability to pay obligations and the ability of the company obtained additional loans from outside parties. It can also be obtained information about the company’s debt to the creditor and the amount of existing owners of investment in the company.

Report of income, is a summary of income and expenses of a company for a certain period, so that it can be seen profits and losses are experienced.

Report changes in capital, is a report showing changes in capital for a certain period, maybe one month or one year. Through capital changes report can be known causes of capital changes for a certain period.
Cash flow report, with the existence of this report the user can evaluate the financial report the company’s net assets changes, financial structure (including liquidity and solvency) and the ability to generate cash in the company’s future.

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