What is financial accounting? What all comes under financial accounting? Hello friends, I am Technical Majid and I welcome you all in today's post. If you want to get complete information about financial accounting, then read this post till the end. 

Financial Accounting 

The process of monetary transactions, classification and summarization is called financial accounting. It is known that the transactions between two persons or two institutions

That is, the act of exchange of goods or services between two parties is called a transaction. 

Transactions having financial properties are called business transactions. If the properties of a transaction are not financial, then it is not recorded in the book of accounts. This means that business transactions always mean financial transactions. 

Although financial accounting also generates some information related to management, its main purpose is to depict or represent the real financial position of the business organization to the employers (investors) and creditors (creditors). 

Reed More : Spotify

In computerized financial accounting, monetary transactions, i.e. receipts of transactions related to money and funds of expenditure are made available through database in the Financial Accounting Module. 

And these are maintained in journals. It should be noted that journals are used to update  basic financial statements such as balance sheet and income statement at a specific time period.

Although computers are traditionally used in the accounting departments of various organizations, the long-standing Generally Accepted Accounting Principles (GAAPJ) have been suppressing  accounting applications to some extent.

Another problem with automated accounting is that it requires an audit trail to backup the accounting entries. 

It should be noted that Random Access Files and database files are very difficult to audit and in many situations processing speed is not even taken into consideration for GAAP compliance. 

Reed More : Mlwbd

Financial Accounting Calculation of Main Objectives

Small to medium sized companies use specialized software packages like Tally for computerized financial accounting.

1. Data entry using accounting software 
2. Billing 
3. Accounts Payable 
4.  Accounts Receivable 
5. Inventory Control 
6. Sales Analysis 
7. Tax - Calculation  
8. Preparing the Pay Roll 
9. To do Budget Analysis  
10. It is used for preparing various government documents etc.

Final Words

Friends, I hope that you have got complete information about financial accounting by reading the article , if you have any question then you can comment