Financial accounting is essential to accurately keep track of the financial records for your organization. Financial accounting records provide internal and external stakeholders with an overall view of financial stability for the upcoming financial year. Thus, the financial outlook determines the goals you set, how your organization operates, and the number of employees and additional resources that can be allocated to different departments. In this article, Giaiphapdonggoi.net presents an overview of what financial accounting is, its duties and who uses financial accounting information.
Table of Contents [Hide]
1. What is financial accounting?
Financial accounting is the process of gathering information and making reports about an organization's financial performance. These reports summarize a company's transactions, describe with whom they transact, and list the date and amount of each transaction. Companies that create financial statements on transactions to show information about the value of the organization. Once they get feedback from stakeholders, they can strategically plan the company's growth model.
What is financial accounting?
Financial accounting is a sub-discipline in accounting that helps organizations provide reports relating to three important areas of a business: assets and liabilities (balance sheet), revenue and expenses. (earnings statement) and cash flow (cash flow statement). Together, these areas can be used for internal and external purposes.
Financial accounting is used to present the financial position of a company to external stakeholders. This allows the board of directors, stock holders, potential investors, creditors, and financial institutions to see how the company has performed over a particular period of time in the past. These reports are filed annually. If a business is considered a publicly traded company on the stock exchange, reports must be made as part of the public record. In a financial accounting course, students learn to prepare, read, and analyze financial statements.
2. Tasks of Financial Accountant and responsibilities of the job
The Financial Accountant job description should clearly state the following duties and responsibilities:
Financial Accountant Duties and Job Responsibilities
Responsible for preparing monthly profit and loss statement and balance sheet.
Tax reporting and inventory handling.
Collect and analyze data, which is then used to prepare weekly and monthly estimates.
Consulting on project funding estimates.
Generate KPI reports.
Prepare weekly cash flow reports and control spending and cash flow.
Assist in the preparation of year-end accounts and statutory accounts.
Answer financial questions by collecting and interpreting data.
Perform internal reviews such as salary reviews.
Check financial records for accuracy.
Manage and train staff as needed.
Let's find out cheap pet strap products in Dong Nai
3. Who uses Financial Accounting information?
Users of management accounting information are fairly easy to identify - they are, essentially, the managers of a company. However, we need to take a little closer look at the users of financial accounting information, and we also need to know a little more about what they do with the information that accountants provide them. Publicly traded companies will make their financial accounting information available to more stakeholders, including shareholders, potential investors, etc. than a private company that will generate a set of statements single financial statement in accordance with International Financial Reporting Standards. Publicly traded companies will also make their financial accounting information available to the public to inform potential investors of the company's performance. So, and another set of financial statements, simplified to make it easier for the public to use.
Who uses Financial Accounting information?
Owners and Managers: When summarizing the financial performance of a company for a specified period of time, the financial statements are essentially a report card for owners and managers. For example, they show whether a company is profitable and provide other information about the company's financial health. They also provide some information that managers and owners can use to take corrective action, although reports prepared by management accountants provide much more depth.
Investors and Creditors: Investors and creditors provide the money a company needs to operate, and unsurprisingly they want to know how the business is doing. Because they know that it is impossible to make smart investment and lending decisions without an accurate report on the financial position of the organization, they study the financial statements to gauge the company's performance. and make an investment decision.
Government Agencies: Businesses are required to provide financial information to certain government agencies. For example, publicly owned companies - those whose shares are traded on a stock exchange - must provide annual financial statements to their respective provincial Securities Commissions.
Other users: Several other external users are interested in the company's financial statements. For example, suppliers need to know if the company they sell their goods to is having trouble paying their bills or may even be at risk. Workers and unions are concerned because wages and other forms of compensation depend on the performance of the employer.
4. Difference between financial accounting and management accounting
What is the difference between financial accounting and management accounting?
There are two key differences between financial accounting and management accounting. The first difference is that management accounting is presented to the company's internal community, while financial accounting is prepared for an external audience. While financial accounting is of great importance to current and potential investors, management accounting is still essential for managers to make current and future financial decisions for the business. their profession. The second difference is that financial accounting is precise and must adhere to Generally Accepted Accounting Principles (GAAP), while management accounting can be based on guesswork or estimation as most analysts Management doesn't have time to get exact numbers at the time of decision. be done.
Above, Giaiphapdonggoi.net has provided you with information about financial accounting. The overall purpose of financial accounting is to produce financial information or reports that can be used by all external users to form the basis of their financial decisions regarding their decisions. Whether this involves lending money or investing money.
Check out other related articles:
- What is JD? Components for Writing Good JDs
- Sample bill of invoice withdrawal
