Financial Accounting SSS 1

Financial accounting is a specific branch of accounting involving a process of recording, summarizing, and reporting the myriad of transactions resulting from business operations over a period of time. Knowing a company’s financial health helps leadership make informed decisions regarding employee payroll, expansion, capital investment, development of new technologies, budgeting for particular departments, and more. By contrast, a lack of understanding of financial health may lead to poor decisions that can result in a company overextending itself — expanding too quickly or investing in new facilities it can’t afford. Businesses use financial accounting to present their financial standing to third parties such as regulators, auditors, suppliers, and investors. This helps companies meet statutory and fiscal requirements, allows for in-depth performance analysis, and provides information to creditors and shareholders that can increase investment. Learning financial accounting enables professionals to play a key role in keeping companies legally compliant, attracting investors, and helping executives make clear-eyed decisions about future plans.