The Environment of Financial Accounting

Financial accounting can be defined as the process to prepare financial reports on the enterprise to be used by both internal and external parties. Users of these financial reports include investors, creditors, managers, unions, and government agencies. Financial statements are prepared and presented for external users. These statements provide the firm’s history quantified in money terms. Most of financial statements generally include: (1) the balance sheet; (2) the income statement; (3) the statement of cash flows, and (4) the statement of owner’s or stockholder’s equity. In addition, note disclosures are an integral part of each financial statement...Read this article completely.