What is financial accounting and what is the scope of financial accounting?

Understand the Problem

The question is asking for a definition of financial accounting as well as its scope, meaning it seeks to explore both what financial accounting entails and the extent of its applications or relevance in practice.

Answer

Financial accounting is documenting, analyzing, and reporting every business transaction with scope including recording, reporting, and decision-making.

Financial accounting is the process of documenting, analyzing, and reporting every transaction of a business or organization. The scope includes recording transactions, reporting to external stakeholders, and providing information for decision-making.

Answer for screen readers

Financial accounting is the process of documenting, analyzing, and reporting every transaction of a business or organization. The scope includes recording transactions, reporting to external stakeholders, and providing information for decision-making.

More Information

Financial accounting is crucial for assessing a business's financial health. It follows guidelines set by bodies like the Financial Accounting Standards Board (FASB) to ensure accuracy and comparability.

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