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  Financial Accounting or GAAP Principles

Introduction to the Financial Accounting or GAAP Principles

Introduction of Financial accountancy

Financial accountancy or financial accounting is the branch of accountancy that for decision makers concerned with the preparation of financial statements, like suppliers, stockholders, banks, government agencies, employees, owners, and other stakeholders. Financial capital maintenance can be calculated in either nominal monetary units or units of constant purchasing power. The basic requirement for financial accounting is to decrease principal-agent problem through measuring and monitoring agents' performance and reporting the results for interested users.

Financial accountancy is employed to get ready accounting information for people outside the organization or not included in the day-to-day running of the company. Management accounting gives accounting information to assist managers take decisions to manage the business.

In brief, the process of summarizing financial data taken from accounting records of an organization and publishing in the form of annual (or more often) reports for the advantage of people outside the organization is known as financial accounting.

Financial accountancy is governed through both local and international accounting standards.

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