What is Financial Accounting all about?

Many times, students are unable to complete their academic tasks and need help, these students can seek professional academic solutions.

Financial accounting is a dedicated branch of the accounting that maintains all the financial transaction done by the company. Using the standardized guidelines laid by the accounting principles these transactions are recorded, summarized and presented in the financial report such as balance sheet and income statement.

A financial statement is issued by the company to its shareholders or the lenders, so it is considered an external. Also, it tends to be widely circulated to competitors, customers, employee, and labor organization and for investment analysis. So actually the financial statement is not a report, with which you report the value of a company instead, its purpose is to provide enough information for others to assess the value of the company.

Because of the external nature of the financial statement, it is used in many ways by the people, it has standard rules known as accounting standards and as generally accepted accounting principles (GAAP). 

Because of its nature, the financial accounting is also popularly known as double entry bookkeeping. All the commercial transaction that a company makes is recorded by using this principle of accounting. Double entry means that every transaction affects at least two accounts. For instance, if a company borrows $50,000 from band two accounts gets affected, first company’s cash account increases and also second Notes payable account increases. 

The double entry also means that there are two accounts affected like the amount entered is debited and one of the reports the amount is credited. For any given transaction the account debited should always be equal to account credited. 

Financial accounting follows the accrual basis of accounting. Inside the accrual, basis revenues are reported when earned not when money is received. Similarly, expenses are reported when incurred not when paid. In this way company’s profitability, assets and liabilities and other financial information are more in line with the reality. 

Financial statement includes:

•    Income statement (also sometimes referred to profit and loss statement)

•    Balance sheet (seldom even seen as statement of financial position)

•    Report of cash (sometimes also designated as cash flow statement)

•    Statement of stockholders equity

Live Web Experts is a renowned academic company that offers best financial accounting help to the students.

Contact us

Live Web Experts

Los Angeles, California, USA

Call @ +1 - (347) 694-7305

Live Chat @ https://www.livewebexperts.com/

Live Chat@ https://m.me/livewebexperts

For Android Application Users

https://play.google.com/store/apps/details?id=gkg.pro.lwe.clients&h