Finance is considering as lifeblood of business. The company used to collect funds from various sources in order to manage and operate their everyday transactions that are done within an accounting period of time. Financial accounting is one of the appropriate processes that will be helpful for the owner as well as accountant in order to record all the essential transactions that are incurred during the time. These entries are posted into their respective statements as per their date of occurrence. This project module aims as analyzing the financial condition and health of the company (Ward, 2012). For this purpose, regular recording of business transactions is being done. On the basis of collected records, its ledger posting, trial balance, and other crucial statements are being prepared under this report. In order to keep the accuracy of the data, every record must be recorded as per the accounting principle as well as other specific standards. Evaluation of bank reconciliation is prepared in reliable order to examine the total cash amount balance available to the company during the end of the accounting period.
(a) Concept of Financial accounting
In every organization, it is necessary for them are organize sufficient amount of capital for the purpose of planning their future projects in effective manner. In this process, managers need to organize capital from various sources. Financial accounting is said to be appropriate art of recording, dividing and evaluating in important way in respect to capital, transaction and activity that are done within an organization. It is also considering as reliable branch of accounting that used to provide right direction to a company’s financial transaction by recording, summarizing and present in financial report. Some of them are profit and loss statements, balance sheet and cash flow statements (Francis, Hasan and Wu, 2013). Most of the company used to release its financial statements on continuous basis.
The statements are taken into consideration as external because they used to provide specific information to the people from outside the company. It is necessary to point out the valuable purpose of financial accounting that is not reported as value of the company. In-spite of their objective which is provided for other to assess the interest of an organization. These financial report is being done with the aim of attaining specific aims that are set by the company. there are some crucial firms those are using various accounting systems by using IFRS standards. Financial accounting is considering as one of the effective aspects which will be considered for attaining maximum return in near future. Financial report are being taken into account in order to keep all the standard and responsibility of manager and accountant. Some of the vital statement those are used in financial accounting purpose are mentioned underneath:
Profit and loss statements: It is known as one of the effective report that is being prepared by the accountant by summarizing the revenue, cost and expenditure of the company incurred during the time. It would indicate total earning and expenses in the mentioned period of time, usually a fiscal year. It will assist companies in analyzing, whether the company is making appropriate revenue, income statements of an organization (Edwards, 2013).
Balance sheet: It would be happening as one of the crucial statements that is being used as particular data those are done by the company during the time. It is considering as company’s main statements which would provide overall health position as well as liquidity state. Financial firms and other stakeholder used to present specific data about assets and liability of the company. This seems to be effective financial statements for delivery available loans and investment done in an accounti