Financial accounting comprises all rules governing the accounting for and reporting of financial information that must be disclosed to people outside the company.

Question

Quizplus · Accepted Answer

Financial accounting is concerned with the preparation of financial statements such as the balance sheet, income statement, statement of cash flows, and statement of changes in equity. These statements are intended to provide information about the company's financial position, performance, and cash flow that is useful to investors, creditors, and other external users of financial information. Therefore, financial accounting rules and standards are designed to ensure that such information is reported accurately, fairly, and in a timely manner.

Financial Accounting Comprises All Rules Governing the Accounting for and Reporting