Reflective Journal: Exploring Financial Accounting Theories

This assignment is a reflective journal exploring financial accounting theories. It begins with an introduction defining financial accounting and its significance in recording, summarizing, and analyzing financial transactions. The journal is structured into four parts: record, reflect, analyze, and action plan. The 'record' section emphasizes the importance of financial accounting for organizations to understand their financial standing and portray their operations to stakeholders. The 'reflect' section details the student's personal understanding of financial accounting, its role in decision-making, and the surprising breadth of the subject. The 'analyze' section discusses the importance of financial statements (balance sheet, income statement, and cash flow statement) in providing a true picture of a firm's financial position. The 'action plan' outlines the student's newfound appreciation for financial accounting and its application in future business ventures. The conclusion reiterates the specialized nature and importance of financial accounting, highlighting its value over other accounting types. The journal includes a bibliography of sources used.

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Introduction
The main purpose of this statement is to study in detail about the financial accounting theory.
Financial accounting theory or financial accounting can be defined as the specialized part of
accounting that records, summarize, analyze even the little financial transactions of an
organization (A 2017). In simpler words the recording of financial data of an organization to use
it later as a source of information for future process is known as financial accounting. This
project is more than an essay, it is a reflective journal in which the financial accounting theories
will be discussed in four parts i.e. Record, reflect, analyze and new action. We will in this journal
record the facts and information about financial accounting then we will see what it reflects and
analyze and prepare a new action plan (Hussain 2015).
Record
I believe that the financial accounting is not only a specialized but a very important branch of
account. As accounting is baseless if there are no financial aspects in it. Any organization in the
world cannot operate successfully until the organization has a proper team or a branch that
records the financial transactions of the firm and the work of the team can be referred as
financial accounting (Pysh 2014). The recording of the financial transactions of the firm is done
in order to know the financial standing of the organization. Hence recording of the financial
accounting is very-important. It is not possible for an organization to interpret the firm’s
profitability if it does not systematically record all the transactions of financial nature that occurs
in day to day business operations. In business world financial accounting plays not only the role
of recording transactions but also the role of portraying the image of the organization about its
operations in front of the stakeholders, so that they can know about the earnings of the company
(Karen Burman 2008).
Reflect
Financial accounting theory or financial accounting is related to the recording analyzing and
summarizing of the financial data of an organization. In this course I have personally developed
a great understanding about the concept of financial accounting. Earlier I use to think financial
accounting as only the recording of the different entries related to business but after studying this
in our course I came to know about financial accounting in detail and the study of course has
made an impact on me that without financial accounting it is not possible for an organization to
tell its investors about the profitability of the firm. I found the most surprising thing while
studying financial accounting that there are so many interesting things financial accounting has
in its squad. Financial accounting is not limited to the financial condition of the firm, but it helps

the organization into decision making as well. It gathers all the financial information, identifies
and measures risk and provides the firm with an accurate decision about investment projects and
their-profitability (Tracy 2013).
Analyze
By studying the course of financial accounting i came to a conclusion that it holds an important
part of the accounting world. For any business organization it is very important to perform
financial accounting. As it tells the how much profit or loss is the business earning. There are
three types of financial statements namely balance sheet, income statement and cash flow
statement (Ittelson 2012). These statements not only helps the organization to record and analyze
but also gives its creditors and other stake holders a true picture of the firm’s financial position.
Action-Plan
I think financial accounting is a vast subject or a branch of accounting, I was wrong earlier as I
only use to take this course as just a normal part of accounting that is only limited to preparing
income statements or balance sheets. I just hated preparing balance sheets and other statements
But after studying this course in detail now I can say that financial accounting is more than the
preparation of balance sheet, it helps the organization or an individual in making decision about
various investment purposes and without financial accounting an organization does not know
whether it is earning profits or loss. Now I can use all this information further in my life and into
my start up business that I am planning to open up soon.
Conclusion
After going through all the required information on financial accounting, a detailed conclusion is
prepared here. Financial accounting is indeed a specialized branch of accounting, and as it is
written above it is much more than the preparation of balance sheet or income statement. If
studied in detail financial accounting can help an organization reaching the top from the floor.
Financial accounting holds much more importance than other types of accounting such as: Cost
accounting, Tax accounting etc.
Bibliography

A, N 2017, 'Financial Accounting & Reporting', Wall Streets Journals, vol 5, no. 10, p. 33, viewed 1 Jan
2016, <https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4712479/>.
Hussain, PMM 2015, 'International Journal of Accounting & Finance', InderScience, vol 2, no. 100, p. 3.
Ittelson, TR 2012, 'Financial Statements', Emeral Insights, vol 1, no. 50, p. 10.
Karen Burman, JK 2008, Financial Intelligence for Entrepreneurs , 2nd edn, Harvard Business Press.
Pysh, P 2014, 'Financial Accounting Importance', in S Berg (ed.), Warren Buffet Accounting, 5th edn, WB
Publishers.
Tracy, JA 2013, 'How to Read a Financial Report', Entreprenuers Weekly, vol 5, no. 120, p. 25.