Accounting

Introduction

Beginners will master the essentials of financial accounting in this course. This financial
accounting overview may also help business administration students. First, let's define
financial accounting. Financial accounting, on the other hand, is the systematic recording of a
company's commercial activity. It is possible to record transactions in chronological or
systematic order.

Why Do You Need Financial Accounting?

Second, why do business schools teach financial accounting?

Self-information: Nothing is more crucial to us as business owners and managers than

understanding our company's status. Let's start with some fundamental strategic questions.
You must know your company's bank balances, equity, and debt. Is your company profitable
or not? How much liquid money do you have to pay all of your creditors? You'll need to
handle both fundamental and strategic difficulties. This is the basis for all your analyses.

It's also critical to keep track of the firm's actions and responsibility. That is, if we can show
commercial activity, we may be held accountable. The balance sheet and income statement
show our company's financial performance. Creditors may inquire about the firm's assets,
liquidity, equity, and obligations. Lenders may use this data to assess your creditworthiness.

The government or other parties (banks, business partners) may ask us to undergo a tax audit
or demand information during specific transactions, such as establishing our ability to repay
creditors.

Accounting's underpinnings
A detailed introduction to financial accounting covers the basics. "Double-entry accounting"
is a term accountants know. The word "double-entry" refers to financial accounting that
incorporates both stock and income data. On one hand, a Balance Sheet will be made to
appraise assets, equity, and liabilities. An income statement, on the other hand, records
revenue and expenses (Profit and Loss Account). But financial accounting's tale doesn't end
there. A cash flow statement is required to monitor cash inflow. Cash flow statements depict
your company's short, medium, and long-term cash flows.

The Balance Sheet.

A balance sheet shows a company's assets, equity, and liabilities as of a certain date (point in
time). "Balance Sheet as of 31.12.2020" implies the stock is only shown as of that date. These
are shown as T-accounts on the balance sheet. The balance sheet debt indicates long- and
short-term assets (left). Debt commitments are reported on the credit side of the balance sheet
(on the right). In general, you should keep track of all your financial assets and
responsibilities. Keeping track of your company's assets and liabilities is critical to
determining stock value.

P&L, Income Statement

Actions that create and consume revenue, such as product sales, may impact a company's
equity. So keep note of both the things sold and the expenditures incurred. L'état des résultats
d'exploitation (or profit and loss account).
CFO's Balance Sheet

A cash flow statement is required to monitor your company's cash flow. The short, medium,
and long term liquidity cash flows may be shown. Quick planning focuses on immediate
inputs and outflows (daily, weekly and monthly). Medium-term, a liquidity flow of two to
three months is expected. Long-term liquidity financial statements might last three months or
more.