Answer»
- EVERY business is required by law, in which the business is registered and operated, to maintain a record of its business transaction and communicate those in the form of financial REPORTS. These reports are commonly referred to as financial statements.
- The users of these financial statements are what we call stakeholders. These are individual, GROUP of individuals or organization which are directly and indirectly interested in the course of a business which includes the owner, managers, employees, creditors, the government or general public.
- Financial accounting is the accounting process that culminates in the preparation of financial reports of a business which is used by stakeholders in forming their economic decisions.
- The main objective of financial accounting is to provide information regarding the financial condition and performance of a business entity. This information are reported and communicated in the form of financial statements.
- Additionally, financial accounting shows the results of stewardship of a business MANAGEMENT. By looking at the financial reports, users can interpret how well or bad the business management has operated and used its resources.
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