Financial accounting generates some key documents, which includes profit and loss account, patterning the method of business traded for a specific period and the balance sheet that provides a statement, showing mode of trade in business for a specific period.
It records financial transactions showing both the inflows and outflows of money from sales, wages etc.
Financial accounting empowers the managers and aids them in managing more efficiently by preparing standard financial information, which includes monthly management report tracing the costs and profits against budgets, sales and investigations of the cost.
Accounting is not an end in itself; it is a means to an end. It performs the service activity by providing quantitative financial information that helps the users in making better business decisions. Accounting also describes and analyses the mass of data of an enterprise through measurement, classification, and summarization, and reduces that data into reports and statements, which show the financial condition and results of operations of that enterprise. Accounting as an information system collects processes and communicates information about an enterprise to a wide variety of interested parties.
Financial accounting helps to provide useful information for decision-making, increase transparency, standardize enterprise behavior.
Reflected by its financial and accounting functions and provide information on the financial position, operating results and cash flows of information, including investors and creditors are included in all aspects of decision-making.
Financial accounting helps enterprises to strengthen management, improve economic efficiency, and promote sustainable development.
The level of enterprise management directly affect the economic efficiency of enterprises, operating results, competitiveness and development prospects, to a certain extent determine the future and destiny of enterprises.
Financial accounting helps management of financial responsibility for assessing corporate compliance.
Including state enterprises received all investors and creditors, including investment, have the responsibility in accordance with its intended development objectives and requirements, rational use of resources, strengthening management, improving economic efficiency, to accept the examination and evaluation.