NOTE: FreshBooks Support team members are not certified income tax

or accounting professionals and cannot provide advice in these areas,

outside of supporting questions about FreshBooks. If you need income
tax advice please contact an accountant in your area.

What Is the Difference Between Accounting and Financial

Accounting?
“Accounting” encompasses all of a company’s financial transactions. A well
managed accounting department will have set policies and procedures for
expenses, data management and the generation of financial reports.

Financial accounting is concerned specifically with the generation of these

reports, that they are based on accurate information and follow “Generally
Accepted Accounting Principles” (otherwise known as GAAP). GAAP sets
accounting standards in the United States for a wide array of topics, including
financial statement presentation.

What Are the Four Basic Financial Statements?

The four basic financial statements used in financial accounting are as
follows:

The Income Statement

An Income Statement is a company’s net income for a certain period of time.

It is a company’s total revenue minus its total expenses.

You will also hear the income statement being referred to as the “Profit and
Loss Statement”.