This paper will discuss about accounting and financial statements for Small Medium Enterprises (SMEs) in Indonesia from two perspectives include theoretical and practices in. The SMEs will support economic growth and assist in reducing poverty through job creation and promotion of labor-intensive. The small medium enterprises have two kinds of problem such as financial and non financial. Financial problem is related to lack of capability in SMEs to have capital to expand their business. Furthermore, non financial problem is related to the lack of management performance. In conclusion, not all financial statements may be prepared, financial statements may not be prepared with sufficient detail, Financial statements may not be prepared appropriately based on Accounting Standard, Financial statements may be prepared irregularly and/or infrequently, Financial statements may not be provided to all parties, financial statements should be routinely analyzed and interpreted by SMEs.
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