Financial accounting is the branch that processes historical information about an entity's transactions and summarizes them into reports called financial statements. The financial statements are used by different interested parties, i.e. the owners, banks, suppliers, the government, etc.
Financial accounting use generally accepted accounting principles (GAAP) in determining the treatment of different transactions and in preparing financial statements.
In this series of tutorials, we will define financial accounting, enumerate the qualitative characteristics of financial information, and take a look at accounting standards and principles.
Financial accounting is the branch of accountancy that deals with the generation of reports called financial statements
. The financial statements present a company's condition, results of operations, cash flows, and other information. Read more..
Financial information is useful when it is relevant
and represents faithfully
what it purports to represent. The usefulness of financial information is enhanced if it is comparable
. Read more..
What are accounting standards? What are they for? Learn all about accounting standards, generally accepted accounting standards or GAAP, and International Financial Reporting Standards or IFRS in this lesson... Read more..
Accounting principles and guidelines form the basic framework upon which more detailed standards and rules are developed. The generally accounting principles (GAAP) and the International Financial Accounting Standards (IFRS) are actually fruits of fundamental accounting principles. Read more..