There is no doubt in it that the demand for management courses is too high at present. Hence it is one of the courses that is preferable by new students. Financial accounting is one of the subjects that are included in the course of management.
It is considered one of the challenging and difficult subjects by most of the students. Financial accounting is one of the most important and relevant subjects of management.
So management students have to complete many types of financial accounting assignments during their entire course. But sometimes most of the students seem confused about what is financial accounting? Even most of the students want to know what are the financial accounting assignment questions teachers can ask in their assignments.
If you are also confused about it, then you came to the right place. Here we are going to discuss in detail the financial accounting and its assignment questions.
What Is Financial Accounting?
Financial accounting is one of the most important branches of accounting. That is used in every business organization or corporates. Every business uses financial accounting to track their financial position by using standardized instruction and guidelines by the related board.
In this branch of accounting, summarised information or data is presented in the pre-defined format or structure to make the conclusion, do proper analysis, and make a comparison.
It is also noteworthy that financial accounting is one of the significant subjects covered in every accounting and management course. This subject requires extensive study and the use of various accounting concepts and terms.
Why is financial accounting important?
There is no doubt in it that accounting is essential for every business and businessman as well. It plays the most important role in the running of the business. Because it becomes helpful for you to track the income and expenditure of your business, and ensure statutory compliance. Additionally, it is also useful in providing management, government, and investors with quantitative financial information required in making an important business decision easily and quickly.
There are mainly three financial statements that generated with the use of financial records of business-:
The income statement of your business, that provides you the information or data about the profit and loss of the company.
The balance sheet of your business, that provides you an actual or clear picture of the financial position of your business in a particular financial year.
Cash Flow Statement
The cash flow statements of your business that works as a bridge between the balance sheet and income statement and reports the cash spent and generated during a particular period.
If you want to keep your business running easily, then you should have to make sure to keep your financial records very clear and transparent.
The primary objectives of Financial Accounting-:
1. Systematic recording of all business transactions-:
One of the most important objectives of financial accounting is to keep records of all business transactions systematically. Then management uses these records later to analyze and summarize logically. So that they can easily use them to prepare financial statements of the business.
2. Ascertainment of the result of above-recorded transactions-:
Then the accountant of the business prepares a Profit & Loss account to know the actual result of all business operations for a specific financial period. The profit and loss account provides the actual expenses and revenue statement of the business.
3. Ascertainment of the financial position of business-:
There is no doubt in it that every business person wants to know the result of the business operations in terms of profit & loss for a specific financial year or period. They are also interested to know about the various liabilities and assets of the business at a particular period.
To know financial positions, the accountant of business prepares a statement of the financial position of a business that is the statement of assets and liabilities of the business called balance sheet. The balance sheet helps to know the accurate financial position of the business for a particular financial year.
4. Providing information to the users for rational decision-making-:
Another one of the most important objectives of financial accounting is to provide financial results of the company to its stakeholders and management so that they can easily make the required and beneficial decisions related to the business.
5. Financial Accounting vs. “Other” Accounting-:
Most of the students seem confused about what is the difference between financial accounting and other accounting. Generally, financial accounting is considered one of the most important branches of accounting. There is another crucial branch of accounting also present in every business that is named managerial accounting.
Actually, the main focus of financial accounting is to create the financial statements of the business to share with both internal and external stakeholders, government, and public. On the other hand, managerial accounting only focused on creating operational reports for sharing within the business or company to make the administrative decisions only.
The major commonly asked financial accounting assignment questions-:
As we already discussed, most of the students want to know what are the financial accounting assignment questions? Here we have mentioned the most common financial accounting assignment question that most of the teachers give to their students-:
- What are the basics of accounting?
- What are the differences between the ”debtors and creditors” of business?
- The different types of costs.
- What is Bookkeeping?
- Role of the contingent liability of business in the preparation of accounts of business?
- What are the equations of accounting?
- how to define the meaning of retained earnings?
- What is the principle of accounting?
- Why is the cash flow statement need?
- how financial accounting is different from other accounting?
- What are the various accounting ratios and how to analyze those accounting ratios?
- What are the requirements for making financial statements?
- The relations between the statement of profit & loss account and balance sheet?
- What are the operating expenses?
We have mentioned all the detailed information about financial accounting that you should know. We have also mentioned what is Financial Accounting? And what are the financial accounting assignment questions? Thus we hope that our blog will become very helpful for you and will clear all your doubts regarding it.
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