What is Financial Accounting?
Financial accounting deals with the body of rules and procedures governing the preparation of general-purpose financial statements (e.g., balance sheet, income statement, statement of cash flows). These financial statements are designed to provide readers with information that will be useful in making decisions relevant to operating their businesses, managing their investments, and evaluating the performance of employees, managers, and executives.
Financial accounting is focused on providing accounting reports and analysis to other areas of the business. Financial accountants are responsible for the creation and issuing of the company’s financial statements, providing accurate and timely information to management and ensuring that all regulatory reporting requirements are met. In financial accounting, the goal is to consistently provide the valuable, accurate and reliable information. The issuing of the financial statements is the responsibility of the financial accounting department. These statements summarize the business’s activities for the year and are used by shareholders, banks, employee bargaining units, and the general public to evaluate the financial worth of the company. The statements are audited by independent accountants to validate the information and provide assurance to readers. The financial statements are comprised of five documents; balance sheet, income statement; cash flow and owners or shareholders equity
