Unit 3 Listen and Read:
Financial accounting
Financial accounting differs from managerial accounting because the information and analyses are for people outside of the organization. This information goes to owners and prospective owners, creditors and lenders, employee unions customers, suppliers, governmental units, and the general public. These external users are interested in the organizationэs profits, its ability to pay its bills, and other financial information. Much of the information is contained in the annual report, a yearly statement of the financial condition and progress of the organization. Various quarterly reports keep the users more current. Bookkeeping involves the recording of business transactions. It is a rather mechanical process and does not demand the financial training and insights of accounting. Bookkeeping is an important part of accounting, but accounting goes far beyond the mere recording of data. Accountants classify and summarize the data provided by bookkeepers. They also suggest strategies for improving the financial condition and progress of the firm. Accountants are especially valuable for income tax preparation and financial analysis.