Question

features of accounting process

Answer 1

1) Monetary Transactions: 
In financial accounting only transactions in monetary terms are considered. Transactions not expressed in monetary terms do not find any place in financial accounting, howsoever important they may be from business point of view.

2) Historical Nature: 
Financial accounting considers only those transactions which are of historical nature i.e the transaction which have already taken place. No futuristic transactions find any place in financial accounting, howsoever important they may be from business point of view.

3) Legal Requirement: 
Financial accounting is a legal requirement. It is necessary to maintain the financial accounting and prepare financial statements there from. It is also obligatory to get these financial statements audited.

4) External Use: 
Financial accounting is for those people who are not part of decision making process regarding the organization like investors, customers, suppliers, financial institutions etc. Thus, it is for external use.

5) Disclosure of Financial Status: 
It discloses the financial status and financial performance of the business as a whole.

6) Interim Reports: 
Financial statements which are based on financial accounting are interim reports and cannot be the final ones.

7) Financial Accounting Process: 
The process of financial accounting gets affected due to the different accounting policies followed by the accountants. These accounting policies differ mainly in two areas: Valuation of inventory and Calculation of depreciation.

Answer 2

Answer:

Essential Features of a Modern Accounting System

Accounts receivable (order to cash)

Accounts payable (procure to payment)

Financial close.

Time and expense capture.

Fund accounting.

Project accounting.

Revenue recognition and management.