Financial accountancy

Source : http://en.wikipedia.org/wiki/Financial_accountancy
             http://kammilashaffirah.blogspot.com/2011/10/akuntansi-keuangan-dan-standar.html

Financial accountancy (or financial accounting) is the field of accountancy concerned with the preparation of  financial statements  for decision makers, such as stockholders, suppliers, banks, employees, government agencies, owners, and other stakeholders. Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power. The fundamental need for financial accounting is to reduce principal–agent problem by measuring and monitoring agents' performance and reporting the results to interested users.

Financial accountancy is used to prepare accounting information for people outside the organization or not involved in the day-to-day running of the company. Management accounting provides accounting information to help managers make decisions to manage the business.

In short, financial accounting is the process of summarizing financial data taken from an organization's accounting records and publishing in the form of annual (or more frequent) reports for the benefit of people outside the organization. Financial accountancy is governed by both local and international accounting standards.

Basic accounting concepts

Financial accountants produce financial statements based on the accounting standards in a given jurisdiction. These standards may be the generally accepted accounting principles of a respective country, which are typically issued by a national standard setter, or International Financial Reporting Standards, which are issued by the International Accounting Standards Board.

Financial accounting serves the following purposes:

• Producing general purpose financial statements

• Producing information used by the management of a business entity for decision making,   

        planning and performance evaluation

• Producing financial statements for meeting regulatory requirements.

Objectives of Financial Accounting :

1. To know the results of the business

2. To ascertain the financial position of the business

3. To ensure control over the assets

4. To facilitate proper management of cash

5. To provide requisite information

The accounting equation (Assets = Liabilities + Owners' Equity) and financial statements are the main topics of financial accounting.

The trial balance which is usually prepared using the double-entry accounting system forms the basis for preparing the financial statements. All the figures in the trial balance are rearranged to prepare a profit & loss statement and balance sheet. Accounting standards determine the format for these accounts (SSAP, FRS, IFRS). Financial statements display the income and expenditure for the company and a summary of the assets, liabilities, and shareholders' or owners' equity of the company on the date to which the accounts were prepared. Assets, Expenses, and dividends have normal debit balances, i.e., debiting these types of accounts increases them. Liabilities, revenues, and capital have normal credit balances, i.e., crediting these increases them.

OPINION : So Statements of Financial Accounting is the recording made by every human being in order to know the deal "companies that we often do, so that reports can be structured properly and neatly, so if we can know or see the re-statement of financial accounting still looks neat and well.