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Definition of Financial accounting?

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Jun 10 '19 at 16:25:17

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Financial accounting:

Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded/ summarized/ and presented in a financial reports as an income statement or a balance sheet prepared in accordance with IFRS.

Companies issue financial statements on a routine schedule annually. The statements are considered as external because they are given to stakeholders also people outside of the company, with the primary recipients being owners/stockholders, as well as certain lenders. If a corporation stock is publicly traded/ however its financial statements tend to be widely circulated and information will likely reach secondary recipients such as competitors / customers / employees / labor organizations and investment analysts.

It's very important to point out that the purpose of financial accounting is not to report the value of a company. Rather its purpose is to provide enough information for others to assess the value of a company for themselves.
Jun 10 '19 at 16:46:51
7 months ago
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