Advantages Of Financial Accounting - Entrepreneur Generations

Major benefits of financial accounting can be studied as follows:

1. Ascertaining And Analyzing Profit Or Loss

Financial accounting ascertains the profit or loss of a business for a certain period. It also identifies and analyzes the reasons for the ascertained profit or loss to take a necessary action to enhance profit or reduce loss in the future.

2. Revealing Financial Position Of The Firm

Financial accounting reveals the financial position of the firm as at the end of the accounting period and analyzes the reasons thereof.

3. Follow-up For Debt Collection

Financial accounting provides the list of debtors and the amounts due on them. Therefore, it helps to follow-up the collection from debtors to minimize bad debts.

4. Arrangement For Prompt Payment

Financial accounting provides the list of creditors and the amounts due to them. Therefore, it helps to timely arrange for the amount payable to them.

5. Reporting On Past And Present

Financial accounting reports to the concerned users of the financial information about the past and present situation and future prospect of the firm.

from Accounting-Management http://ift.tt/2zFpspq Advantages Of Financial Accounting - Entrepreneur Generations

Posted by Entrepreneur Generations

Tweet