Finance And Accounting Flashcards, test questions and answers

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What is Finance And Accounting?

Finance and accounting are two closely related business disciplines that involve the tracking of money, assets, and liabilities within an organization. Finance focuses on the management of capital resources through investment, budgeting, and forecasting to achieve a desired financial goal while accounting is focused on providing accurate information about the financial position of an organization.Financial management involves decision-making related to investments, financing activities, cash flow management, and risk analysis. This includes deciding which projects should be undertaken and how resources should be allocated in order to achieve financial goals such as maximizing returns or minimizing costs. Financial managers also analyze financial statements to assess the performance of individual investments or portfolios.Accounting is focused on providing reliable information about an organization’s financial position so that decisions can be made by lenders and investors. This involves recording all economic events in accordance with generally accepted accounting principles (GAAP) and preparing regular financial statements such as balance sheets and income statements for external review. The data contained in these reports is used by various stakeholders including creditors, investors, auditors, tax authorities and other regulatory bodies to evaluate the performance of a business.In conclusion, finance and accounting are two closely related disciplines that focus on different aspects of managing capital resources within an organization. While finance focuses on decision-making related to investments and cash flows as well as analyzing performance data from these activities; accounting is focused on providing reliable information about an organization’s financial position so that stakeholders can make informed decisions regarding their involvement with it.