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May 10, 2023

    Financial accounting is an organised course of action including activities such as recording of accounting transaction, classification, verification, interpreting, summarizing and communicating or reporting of financial information. Financial accounting provides details and information regarding availability of existing or potential resources, way of financing and output through their utilisation. Financial accounting also provides groundwork for Internal and external stakeholders in order to take significant decisions (Agasisti and Catalano, 2013). All activities and functions of financial accounting are governed or administrated by some rules and guidelines called as financial accounting principles such as UK GAAP (Generally Accepted Accounting Principles). This report provides an explanation about definition of financial accounting, purpose of financial accounting, internal and external stakeholders and brief knowledge about accounting concepts, purpose of providing depreciation and major methods of depreciation, control accounts and purpose of bank reconciliation statements.


    1.Financial Accounting and its purpose:

    Financial accounting refers to a systematic process classification of financial and non financial transactions, recording of transaction, summarizing them for a better interpretation and reporting under a formal format to internal and external stakeholders. Financial accounting processes are structured in a systematic way and ensures compliances of various accounting principles, policies, rules and regulations (Alver, Alver and Talpas, 2013). Financial accounting gives a structure for quick assessment of any problems and for taking vital decisions. Following are the most considerable purpose of financial accounting, as follows:

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