Financial Accounting – Introduction and its Functions

Financial Accounting is the 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 the Profit/loss and balance sheet of the business in the particular financial year.

Meaning of Financial Accounting explained with the help of Animated Video:

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We will know more about the financial accounts by knowing the following functions of it: –

Functions:-

The main function is to make systematic records of financial transaction of the business. Systematic records mean use standard of financial accounts and the nation’s government guidelines to record each and every financial transaction of the business enterprises.

After recording the financial transaction of business in a systematic way, the team of financial accounting has to analyze and summarise the whole transaction to show the correct financial position of the business. The team will analyze it in Trail Balance and summarise it in the final account to know the profit or loss of business enterprises in a particular financial year.

The Team of FA has to communicate results of business financial position of a particular financial year to all the parties. They will provide them with the Financial Statement: –

The Team of financial accounting has to meet the legal requirement. like Audit the books of the particular financial year from external Auditor and paid tax liabilities as per the taxation system of the country law.