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Can You Describe The Objective Of Financial Accounting?

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Syed Rizwan Ali Shah Hamdani Profile
Objective of Financial Accounting (FA):    The objective of financial accounting is to collect accurate, systematic, and timely financial data and other financial information, and to compile and consolidate it in an organized and systematic way, according to the principles and rules of accounting, for reporting purpose.    The financial managers use these reports to assess the financial position of the company through various financial management tools and then the financial position can be compared to, or benchmarked against, the industry norms. The four different financial statements used for the purpose of reporting and analysis are    1. Balance Sheet  2. P/L or Income Statement  3. Cash Flow Statement  4. Statement of Retained Earnings (or Shareholders' Equity Statement)    In financial accounting, assets are recorded on the basis of historical costs in the balance sheet, i.e., the assets are recorded at their original purchase price. Of course, the depreciation on the asset is duly subtracted from its original value as the asset remains in use of the business.    However, in financial management, book value is seldom used and financial managers consider the market value and the intrinsic value of assets.  Market value may be defined as the value currently prevailing in the market or the value at which the sellers are ready to sell, and buyers are ready to buy a particular asset.  Intrinsic value or the fair value is calculated by summing up the discounted future cash flows.
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Anonymous answered
It helps in decision making
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Anonymous answered
Hi
ans.
  The object of accounting is to record the data of an organization  in proper way first of all journal ledger trail balance and then balance sheet  these are the way to record data .

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