BACKGROUND TO THE STUDY
Financial Accounting may be defined as the process of identifying measuring, and communicating economic information to permit informed judgments and decisions by users of the information. It is the maintenance of daily record of all financial transactions in such manner that it would help in the preparation of suitable information regarding the financial affairs of a business or an individual.
Financial Accounting is a pre-requisite for good management of business and non-profit making organizations. Lack of accounting efficiency has led to abnormalities in the financial administration of both public and private institutions in this country. Keeping record and development of an effective communication system are very essential in every human activity. Such practices do not only serve as a source of reference but also may provide source of understanding for future decisions. The improvement in accounting education besides moral training has significant ways of improving the efficient operation for economic sector of the country’s development.
Financial Accounting is the discipline that plays this important role in business with regard to recording and reporting the financial performance of an entity. Due to the importance of financial accounting for national development, Ghana has an institute which is responsible for conducting examinations and training professional accountants in the country. The institution has been named institute of Chartered Accountants, Ghana (I.C.A Ghana). It was established by an Act of parliament Act 170, which was officially announced on April 19, 1963. It is internationally affiliated to Association of Accounting Bodies of West Africa (A.B.W.A) and International Federation of Accounting (IFAC). Financial Accounting as a subject was introduced by the authorities of Kumasi High School (KUHIS). Kumasi High School was established in the year 1962 as a mixed school known as Kwame...
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