Financial accounting is a solution to overcome the administrative complexity in a business. Company or organization must have the financial accounting is used to account for income and expenditures. Financial accounting is held by the treasurer of a company or organization. In large companies, accompanied by a financial advisor.
Definition of Financial Accounting
Financial accounting is part of accounting that prepares financial statements for parties outside the company or organization. There is also a saying that financial accounting is a means of communication needed between financial activities with those who need financial information company or organization. The most important principle when doing financial accounting is equal receipts.
Benefits of Financial Accounting
The first benefit of financial accounting company or organization can control the finances based on observations of outsiders. Outside parties who are authorized to control the finances of companies or organizations are shareholders. With the financial accounting, the financial activities of communication happens during certain periods. Besides that financial accounting can also be used by managers and shareholders to issue a decision based on the estimated allocation of resources so that decisions are not detrimental to the company or organization, shareholders, management, as well as consumers.
Principles of Financial Accounting
There are some financial accounting principles must be embraced by the administrative manager of accounting so that communications are good. That principle which include sustainability, accounting period, objective entity accounting, exchange rates, load calculations with income, exchange rates, measuring units of money, accounting cycle. In the financial statement, a report must be objective Bedahara financial activities so it takes nature honest and conscientious. Honesty treasurer is an important thing that must be considered as directly related to the confidence of shareholders that determines the smoothness of the business. Because that honesty treasurer balanced with accuracy that determines the validity of a financial calculation.
The substance of Financial Accounting
Develop a financial accounting course should be noticed that the substance or content. A financial accounting should include information gains and losses, the balance sheet, information of changes in capital and cash flow information. If all three of these substances is explained carefully in financial accounting, then the shareholders, the management of stock, as well as management authorities did not trouble predicting administrative activities will be planned. Besides that financial activity can be controlled so that the plan will be implemented does not exceed supply budget.
The cornerstone of Financial Accounting
Financial accounting not just made at will or only because of the demands of leadership. Financial accounting was grounded by GAAP or the Financial Accounting Standards. SAK was made by the Indonesian Institute of Accountants Association. SAK loading conventions or regulations that have been drafted and approved by official agencies. SAK contained in IAS or Statement of Financial Accounting Standards which is a handbook of all things related to accounting. A treasurer or accountant must understand the content of IAS and IFRSs in order to weight the financial accounting prepared in accordance with the expectations of the leadership. The contents of satisfactory financial accounting is transparent in naming the nominal and the need for some specific period. So it can be concluded that financial accounting is administration solutions within a company or organization. With the financial accounting is accurate, then the shareholders, the management of stock, as well as management will be easier to control the financial activities during some periods.