Question

Aims n objectives of final account

Answer 1

the process by which an organization's revenue, receivables, and expenses are collected, measured, recorded and finally reported. This process is designed to accurately reflect business activity, help companies meet legal, fiscal and statutory requirements, present financial accounts to business owners, allow for in-depth financial analysis, and facilitate efficient resource allocation.

Across financial accounting, companies have two basic ways they can structure their business’s accounting. Publicly traded companies must use the accrual accounting method which is standardized under generally accepted accounting principles (GAAP). Many private companies also use GAAP but they are not required to. Private companies also have the option to use the cash accounting method.

Financial Statements

In a practical sense, the main objective of financial accounting is to accurately prepare an organization's final accounts for a specific period, otherwise known as financial statements. The three primary financial statements are the income statement, the balance sheet and the statement of cash flows.

A company’s financial statements serve several purposes. They provide important information to shareholders and loan creditors which can help to improve investment interest. The financial statements are used internally by management to manage both the current operations and future activities for the firm. The financial statements also provide information for all types of investors to prepare analysis using trends, ratios, and industry comparisons.