Advanced financial accounting is used to prepare accounting data for people outside the organisation or for those, who are not involved in the mundane administration of the company. Management accounting, provides accounting information to help managers make decisions to manage and enhance the business. In short, financial accounting is the process of summarising financial data, which is taken from an organisation’s accounting records and publishing it in the form of annual or quarterly reports, for the benefit of people outside the organisation. Financial accounting is governed not only by local standards but also by international accounting standard.
Financial accounting generates some key documents, which includes profit and loss account, patterning the method of business traded for a specific period and the balance sheet that provides a statement, showing mode of trade in business for a specific period. It records financial transactions showing both the inflows and outflows of money from sales, wages etc. Financial accounting empowers the managers and aids them in managing more efficiently by preparing standard financial information, which includes monthly management report tracing the costs and profits against budgets, sales and investigations of the cost. Accurate and reliable financial information is the lifeline of commerce and investing. Presently, there are two sets of accounting standards accepted for international use namely, the U.S., Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). While the book is aimed at advanced level accounting degree students in tertiary institutions, it is a useful primer for practitioners who wish to reinforce their knowledge of rapidly changing accounting standards.