Financial Accounting and its Purposes

Financial Accounting
Principles

Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
1. Financial accounting and its purposes................................................................................3
2. Two internal stakeholders and four external stakeholders of a large business organisation.
................................................................................................................................................4
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In reporting period, the volume of transactions carried out by enterprises is logical and
consistent, yet these transactions retained during one year are filmed throughout the financial
reports of the undertaking. Financial Accounting (FA) is indeed a method by which accountants
monitor their financial benefit as well as financial wellbeing in about their accounting reports,
including an income statement, statement of financial position balances and cash flow statement
(Pratt, 2013). It implements different concepts such as accuracy, duplication, consistency,
alignment, economic metrics and accounting practices.
PART A
1. Financial accounting and its purposes.
Financial accounts are the area in which money transfers performed during operations have
to be analysed, examined, produced and reported. It includes the establishment of accounting
reports, also known as economic statements such as, cash flood statement (SOCF), adjustments
to the income of borrowing funds as well as the required notes, which comprise the accounting
rules, conferences and revenue and expenditure identification core values (Deegan, 2013). At
either the close of each fiscal year, the main objective of financial accounts is to evaluate fund or
money and financial situation. These are declarations based on accounting policies including the
UK GAAP, IAS, as well as, throughout the globalised era, multinational corporations compile
their transactions in a harmonious way though the IFRS. A double bookkeeping scheme for
entering into account holders is accompanied by institutions that record all accounts from ends,
credit and debit.
Accountable accounts were also essential, since the company could not analyse its
monetary position (i.e., profitability, cash flow and corporate performance) without organising
an accurate documentation for financial events conducted in day-to-day operations. It tends to
aid also key stakeholders like management and workers to obtain relevant data they need for
rationalised decision-making process, it supports outsiders like authorities, shareholders,
creditors as well as other authorities. In the United Kingdom, under the Company Act of 2006,
all limited by guarantee organisations are required by law to write their money transfers in
audited reports and document to multiple stakeholders.
Purpose of FA