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Financial accounting means the financial transaction of a company. It is very important for students to understand the various terms related to this topic before they solve various questions related to it.

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What is the importance of Financial Accounting?

Financial accounting deals with the study of accounting in which the financial transaction of a company is required to prepare. There are some standardized guidelines and with the help of these guidelines, different actions take place as these transactions are summarized, recorded and reported by presenting them as balance sheet or income statement. So, each action has its value, which is important for the company too.

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What are the various primary Financial Accountings?

There are three main Financial Accountings as –

  • The Income Statement
  • The Balance Sheet
  • The Statement Of Cash Flows

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What are the various qualities of financial accounting?

While you prepare various representations of the financial statement, then there must have some qualities in that. These are –

  • Relevance
  • Materiality
  • Understandability
  • Reliability
  • Comparability

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