1. What is Financial Accounting?
Statement of final accounts or financial accounting is the process of preparing financial statements that companies’ use to show their financial performance and position to people outside the company, Including investors, creditors, suppliers, and customers.
2. What are Financial Statements?
Preparers of financial statements generally put together a quarterly and annual financial statement, which they make available to shareholders and the investing public. There are four basic financial statements used in the accounting world to show a company’s financial performance:
|Income Statement or Profit and Loss Statement -||
In accordance with the Generally Accepted Accounting Principals (GAAP), revenue is always recorded in the period of the sale of the goods and services, which may not be the same period when cash is actually received.
|Balance Sheet -||
|Cash flow statements (CFS) -||
|Statement of retained earnings -||
3. Where Do We Find These Financial Statements in Tally.ERP 9 and What are the Shortcut Keys to Assess them?
|Financial Statements||Where do we find them||Shortcut key|
|Income and Expenditure or Profit and Loss Account -||
Where do we find them ? On gateway of Tally screen
Income and Expenditure Account :
Income & Expenditure Statement is suitable for organizations which do not engage in trading of goods or services.
We can toggle between Income and Expenditure Statement and Profit & Loss A/c by pressing F 11 on the keyboard, and setting the option Use Income and Expenses A/c instead of Profit and Loss A/c? to Yes/No as, as required.
For Profit and Loss Account = Letter “P” on the keyboard
For Income and expenditure Account = Letter “N” on the keyboard
|Balance sheet -||Where to find ? On the gateway of Tally screen.||Letter “B” on the keyboard|
|Cash flow statements -||Where to find ? Gateway of Tally > Display > Cash/Funds Flow > Cash Flow .|
4. What Purpose Does Financial Accounting Serve?
The main objectives of financial accounting could be
- To ascertain the operating results of the enterprise
- To exhibit the financial position of the business; and
- To thrust control over the operation as well as the resources of the business.
Apart from the above there are some objectives of financial accounting which could be derived from the above and they are
Systematic Record maintenance
Financial Accounting is to report the results of most business events. Hence, it becomes important to keep a systematic record of these events. This function embraces recording transactions in journal and subsidiary books like cashbook, sales book etc., posting them to ledger accounts and ultimately preparing the financial statements [final accounts].
Communicating the Results
The other main function of financial accounting is to communicate the financial facts of the enterprise to the various interested parties like owners, investors, creditors, employees, government, and research scholars, etc.
The cause of this function is to enable these parties to have better understanding of the business and take sound and realistic economic decisions.
Meeting the Legal Requirements
Financial accounting aims at fulfilling the legal requirements, especially of the tax authorities and regulators of the business by discharging this function in accordance with certain fundamental truths and uniform enforcement of generally accepted accounting principles.
5. Tally Accounting = Financial Accounting
Tally Accounting is a software used for financial accounting purposes. It is provided by Tally Solutions and is a standard business accounting software. Tally.ERP 9 is a very robust ERP product and is a complete business management solution.
All the accounting activities, such as financial records of a business, the generation of statements concerning the liabilities and assets of a business, all of them are easily managed with Tally solution.
The name of the business solution, Tally, is inspired by the meaning of the word "tally", which is to count, to keep the record.
Accounting is the activity or the system of keeping records of transactions of a business or any other organizations in monetary terms. It records the money or value for money received by or given to different persons or entities from time to time. It enables an organization to ascertain facts such as money owed to or by different entities, the assets and liabilities of the organization in different forms and the profit or loss made by it during specified periods.
Tally is a trade name of accounting software maintaining accounts, and for performing additional accounting and other analytical operations helpful in management of an organization.