Financial accounting characteristic , advantages and disadvantages
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| Accounting principles |
ACCORDING TO INSTITUTE OF CERTIFIES PUBLIC ACCOUNTS (U.S.A)
"Accounting is the art of recording classifying and summarizing in a significant manner and in terms of money transactions and events which are in part of at least of financial characters, and interpreting the result there of ".
According to accounting principles of board:-
"Accounting is a service activity its function is to provide quantitative information , primarily , financial in natural about economic entities that is intended to be useful in making economic decision , in making reasoned choice among alternative course of action .Accounting includes several branches for e.g. : Financial accounting , Managerial accounting , Government accounting" .
In simple words it’s a science of recording various business expenses according to specific purpose.
Main features of accounting:-
a. Financial accounting process (financial in nature)
b. Its summary (historical nature)
c. Coverage
d. Monetary transactions (business transactions)
e. External use
f. Interim reports
g. Legal requirement
h. Disclosure of financial status
Avantages and limitations/Disadventages of financial accounting
1.Its knowledge based related to purchase and sales of goods.
2. Limited memory storage.
3. It on basis of tax.
4. Financial accounting is comparative study.
5. It’s useful in debt realization.
6. It also useful in managing the business.
7. Useful in checking frauds.
8. Has proof in court.
9.Financial account is benefit to government.
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