Definition of Financial Accounting



Financial accounting is a branch of accountancy that deals with recording financial transactions into proper heads and generating financial reports for its users. Organizations perform business transactions on daily basis. Financial accountants record these transactions into proper accounts and prepare financial reports according to the applicable financial reporting standards that are called financial statements.

 


There are five types of financial statements named as, statement of financial position, statement of comprehensive income, statement of cash flows, statement of changes in equity, and notes to the financial statements. The standardized financial statements are then published as part of the annual report of the companies for the users of financial statements.  


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