Financial accounting consists of capturing and recording all the transactions that affect a company's financial state and then using these documented transactions to prepare financial statements for external decision makers.

Question

Quizplus · Accepted Answer

This is a correct definition of financial accounting, which involves documenting and summarizing financial events to create reports for outside stakeholders such as investors, lenders, and regulatory agencies. These reports are used to assess the company's performance, profitability, and financial health, among other metrics.

Financial Accounting Consists of Capturing and Recording All the Transactions