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Principles of Financial Accounting Solved Assignment

   

Added on  2021-02-20

8 Pages2015 Words31 Views
FINANCIAL ACCOUNTINGPRINCIPLES

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1a. ......................................................................................................................................................11. Explaining the meaning of financial accounting and its objectives........................................12. Listing two internal and four external stakeholders and also their interest in the financialinformation of the enterprise. .....................................................................................................1CONCLUSION................................................................................................................................1REFERENCES................................................................................................................................2

INTRODUCTIONFinancial accounting principles means the guidelines towards established standards inorder to achieve sound practices of the accounting for the purpose of reporting periodicperformance and the financial status of the business. Financial accounting is the process ofcollecting and processing the financial information in order to meet decision-making requirementof the parties internally as well as externally. The present study is based on various aspects of thefinancial accounting principles that includes concept and the purpose of the financial accountingand the users of the accounting information who are interested in the financial statements of theorganization and are highly affected by the financial health of the business. a. 1. Explaining the meaning of financial accounting and its objectives.Financial accounting referred as the branch of the accounting that maintains the track ofthe financial transactions of an enterprise (Mullinova, 2016.). With the use of the standardizedguidelines, recording, analysing and presenting the transactions of the business in the financialreport or the financial statement like the income statement and the balance sheet. This helps inreporting operating profits and the business value to stakeholders. Financial accounting is beenused for the purpose of reporting the financial transactions to the users in an appropriate formatwhich is acceptable and is adaptable by all the businesses. Purpose of Financial accounting :To keep the records systematically- Financial accounting facilitates systematic record ofthe business transactions. This in turn helps in developing the effective preparation of thefinancial statements. To provide for rational decision-making- The major purpose of the financial accountingis to facilitate information which is essential for making sound economic decisions. To act as the Information system- The primary objective of the financial accounting isthe preparation of the financial reports that provides for the information relating to theperformance of the company to the internal and the external parties like investors, tax authorities,employees, owners, creditors etc (Libby, 2017). Reporting of the financial information withfulfilment of the legal obligation to all the interested users is also one of the most importantobjective of the financial accounting. 1

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