How does Financial accounting prepare the financial reports? Accounting is the process of recording financial transactions pertaining to a business. The types of accounting are Financial accounting, Public accounting, Government accounting, Forensic accounting, Management accounting, and Tax accounting. Financial accounting is a particular type of accounting that includes a method of documenting, summarizing, and reporting the transactions arising from business operations for a period of time. Financial accounting reflects the accounting on "accrual basis" over the accounting on "cash basis". The main purpose of financial accounting is to prepare financial reports that provide information about a firm's performance to external parties such as investors, creditors, and tax authorities. Functions of Accounting are; control of financial policy, and formation of planning, preparation of the budget, cost control, evaluation of employees' performance, Prevention of errors and frauds.

Navya R Nair

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