Financial accounting is mainly concerned with the publication of an income statement and statement of financial position. It is mostly for external use for example suppliers, customers and investors.
The information that is presented needs to be able to:
- Quantify (put into numbers) all items such as sales, expenses
- Present the account in a meaningful way so that it can be compared to other businesses
- Provide information to the owner and other stakeholders
We will begin by looking at the financial accounting system