Financial accounting is recording, summarizing and reporting transactions in a business. Financial accounting gives the clear of company’s accounts before shareholders of company. Financial accounting also gave information about the performance of the company over a specific period of time.
Financial accounting and managerial accounting are two different but equally important branches of accounting. Overall accounting includes calculation of financial figures such as tax, profit, expenses, income and many others. However in this article we will only discuss the areas related to the cost
Following is the difference between Financial Accounting and Cost Accounting Financial Accounting Cost Accounting 1.Provides information to external 1.Provides information to internal users. 2. Provides general purpose financial statementsand reports 2. Provides special purpose statements 3. Must conform to generally accepted accounting principles 3.
Limitations from which financial accounting suffers may be summarized as follow: 1. Historical And Monetary Nature. Emphasis of financial accounting is on recording transactions revenues only after they have occurred, then summarizing and reporting this information at the end of accounting year in the form
Original financial accounting model based on double entry system of book keeping, developed by an Italian merchant named Lucas Pacioli, is basically to fulfil managerial requirements of a trading business. Financial accounting can measure results of a merchandising business on the basis of departments
Financial accounts provide information to inside users i.e, management of accounting entity and to outside users like shareholders, investors, bankers, government departments, trade unions and general public. The information provided by financial accounting is presed in the form of profit and loss account/income statement