
Financial Accounting is measurement, processing, and communication of financial information about a business or organization.it is basic accounting or initial level accounting in which we are recording, summarising and analyzing day to day transactions of the particular business. and at the end, we will get to know about the financial position of a business or an organization by preparing Profit/loss and balance sheet of business in the particular financial year.
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Definition : –
-(AAA) The American Accounting Association.
“The process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information.”
-AICPA The American Institute of Certified Public Accountants.
“Accounting is the art of recording, classifying and summarising, in a significant manner, and in terms of money, transactions and events which are, in part at least of a financial character, and interpreting the results thereof.”
We will know more about the financial accounts by knowing the following functions of it: –
The Content covered in this article:
Functions:-
1) Systematic record: –
2) Analysing and Summarising: –
3) Communicate results: –
- Shareholder/Owner(s)
- Government
- Investors.
- Other related parties like Creditor, debtors, money lenders, etc.
4) Meet legal requirements: –
If you have any question about this topic please ask it in the comment section below: –
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