What Is Financial Accounting?

Financial accounting is the process of recording and reporting the economic effects of transactions. In other words, when cash is received or paid, the financial effects are recorded in the financial statement. This principle applies to revenue and expenses. Revenue is recognized when the entity earns them, and expenses are recognized when they are paid. The matching principle also applies to interest, which is recognized when paid between the purchase of a fixed income security…

"What Is Financial Accounting?"