FINANCIAL ACCOUNTING AND CONCEPT

Actually Financial Accounting is a skills and concepts .It provides the message that is needed for sound economic decision making. The main objectives of financial accounting is to prepare the financial reports that provides messages about a organisations performance to external audience such as investors, creditors, and tax authorities,shareholders. On the other hand, it is also performed according to Generally Accepted Accounting Principles or GAAP method.

Actually businesses have two primary objectives:
   1. Earn from profit
    2.Remain to solvent

The four financial statements are :

    1.Balance Sheet
    2.Income Statement
     3.Statement of financial position
     4.Statement of Cash Flows

Double Entry Accounting

Financial accounting is based on Double Entry book keeping system.which each transaction has two effects.One is debt and another  is credit.
 Assets  =  Liabilities  +  Equity

To record transactions, one must be:
1.    Identify an event that has affected the entity financially.
 2.   Measurement the event in the monetary terms.
 3.   Determine which accounts the transaction will be affected.
4. Determine whether the transaction will be increased or decreased the balances in those accounts     5.Record the transaction in the ledger books.
All larger business   follows  the double entry book keeping system. Under the double entry system, instead of recording a transaction in only a single entity account, the transaction is recorded in two accounts of ledger.




This is the financial accounting.Actually it provides internal and external information of organisation.It is helpfull for all financial stakeholder.