BCA 2ND SEMESTER AFM 2021

What is Accounting?

Accounting is the measuring, processing, and recording of financial transactions of an organization. The process is to summarize, analyze, and record such information to be reported to management, creditors, shareholders, investors, and the oversight officials or tax officials.

The primary objective is reporting the financial

 information or transactions using Generally Accepted Accounting Principles (GAAP).

Accounting can be divided into several fields like Financial Accounting

Financial Accounting

Financial accounting refers to bookkeeping, i.e., identifying, classifying, summarizing and recording all the financial transactions in the Income Statement, Balance Sheet and Cash Flow Statement. It even includes the analysis of these financial statements.

What is Financial Management?

Financial management helps to manage the finances and economic resources of the organization. It is about managing the organization’s economic activities efficiently to achieve financial objectives. Financial management aids management in better decision-making.

A key objective of Financial management is to create wealth for the business and investors, generate cash, and earn good returns at adequate risk by using the organizational resources efficiently.

Key elements of financial management are Financial planning, control, and decision-making.