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Explain the need of financial accounting?
Financial accounting provides information to individuals inside and outside the organization to help the access the firm's financial performance. These financial reports including the income statement, the balance sheet and the statement of cash flows summarize a company past performance and evaluate its financial health.
Financial Accounting provides information on financial performance of an organisation to parties inside and outside the organisation, which helps in decision making.
Finacial Reports -
Statement of Comprehensive Income,Statement of Financial Position,Statemet of Cas Flow,Statement of Changes in Equity and Notes related to the above statements gives a complete picture about the organisation.
It's Very important as it provides the basic information regarding stability to stakeholders, So they easily make decision regarding company on going performance. Thanks
The importance of financial accounting is to tackle every account there is in the financial statement. From cash to shareholder's equity. Every accountant should have the proper knowledge in every account because he/she handles the general ledger of the company. He/she should know how to address discrepancies in his/her ledger in order that such errors will be resolved properly. Now, accountants who do not even know the basics of financial accounting are bound to fail in balancing the financial statements of the company they are in because they have not learned the basics of financial accounting..
