FINANCIAL ACCOUNTING: WHAT IS IT AND WHY IS IT IMPORTANT?
In financial accounting, a company’s transactions are recorded, summarised, and reported by means of financial statements. There are four different statements in the financial statement: the Income Statement, the Balance Sheet, the Statement of Retained Earnings, and the Statement of Cash Flow.
How are they used?
All of these statements are used in various ways in any business or organisation.
- The management team will use this to plan their respective business plans and the direction the business is operating in. In addition, they will use it to keep a handle on cash flow and any potential issues in the business.
- Investors will review these documents to ascertain if they want to invest in the business and how much they would want to invest and will look at risk vs. profit, etc.
- Auditors use these for annual audits and to ensure the organisation is compliant with legislation and SARS.
- Should the company ever want to apply for bank loans the bank will need to see these documents to ascertain risk and liability.
- Suppliers may at times want to see these financials before extending credit for services rendered or stock provided.
Every business needs someone to manage its books
Do you want to become an accountant or offer indispensable bookkeeping and financial accounting skills? What about studying accounting?
As a student of the ICB Financial Accounting course, you will gain knowledge and practical skills in bookkeeping, financial accounting, income tax, financial management, reporting standards, corporate strategy, management accounting, and research.
You can get your first qualification in financial accounting after 4 subjects!
There are 12 subjects that build on each other. You will be able to get the ICB Financial Accounting: Foundation Level of this programme (and achieve the National Certificate: Bookkeeping) after successfully passing just four subjects.
This financial accountant course is for anybody. When you keep studying, you will progress through the intermediate levels to the final and most advanced levels.
Did you know you can join a professional body and get a designation?
Professional bodies award designations to people who hold recognised, registered qualifications with relevant work experience. Still studying? No problem!
Reference: What is financial accounting? https://www.icb.org.za/what-is-financial-accounting/