Accounting allows a company to analyse the financial performance of a business and represent its position through past and future statistics. An accountant is a person in charge of conducting such a process by following certain sets of rules and regulations. Such a role is vital for any business to the point that it is considered the “backbone” of an organisation.
There are two main types of accounting, formally known as financial accounting and management accounting. Easily put, one can say that financial accounting looks at the past, whereas management accounting is more concerned with the future. There are numerous distinctions between the two forms of accounting to the point that organisations normally assign financial accountants as well as managerial accountants.
The major goal of performing financial accounting for a company is to prepare financial statements at the end of a twelve month period. Some of these statements consist of the following:
Balance sheet – A report on a company’s assets & liabilities at a particular point in time Income statement – A report on a company’s income, expenses and profits over a period of time Cash flow statement – A report on a company’s cash inflow and outflow activities Producing such reports is the main job of a financial accountant and the purpose of these...