Introduction

Financial Accounting is an area of accounting that considers cash or other monetary items as a basis of determination of performance rather than as a determinant of production. In financial accounting process accounting data or information is classified as cash inflow and out outflow in terms of revenue and expenditure, assets and liabilities. Financial data and information are collected and then summarised in order to prepare financial statements, income statements, cash flows, change in equity for reporting purpose (Edwards, 2013). In financial accounting main motive of organisation is to present financial data and information in a systematic manner for user of financial data such as investors, relevant authorities, lenders and creditors, debtors etc. This report describes purpose of financial accounting, regulations concerned with financial accounting, rules and principles of accounting, different aspects of financial reporting including concepts and conventions related to consistency and material disclosure.