Definition

Financial accounting

Financial accounting refers to the field of accounting that provides economic and financial information for investors, creditors, and other external users. The information needs of external users vary considerably.

It is a section of the balance of payments accounts. Under the revised format of the International Monetary Fund, the financial account measures long-term financial flows including direct foreign investment, portfolio investments, and other long-term movements. Under the traditional definition, still used by many countries, items in the financial account were included in the capital account.

Share it:  Cite

More from this Section

  • Profit center
    A profit center refers to a responsibility that incurs costs (and expenses) and also generates ...
  • Monetary unit assumption
    The monetary unit assumption requires that companies include in the accounting records ...
  • Bookkeeping
    Bookkeeping is a part of accounting process that involves only the recording of economic ...
  • Stock dividend
    A stock dividend is a pro rate distribution to stockholders of the corporation’s own ...
  • Payroll deductions
    Payroll deductions refer to deductions form gross earnings to determine the amount of ...