Financial accounting

Financial accounting is a branch of accounting that focuses on the preparation of financial statements for external use by stakeholders such as investors, creditors, regulators, and the general public. It involves recording, summarizing, and reporting financial transactions of an organization in accordance with generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS). The main financial statements produced through financial accounting include the income statement, balance sheet, statement of cash flows, and statement of changes in equity. These statements provide valuable information about the financial performance and position of a company. Financial accounting is important for several reasons: 1. **Transparency and Accountability:** It provides transparency into a company's financial performance and position, enabling stakeholders such as investors, creditors, and regulators to make informed decisions. This transparency enhances accoun...