What Is the Purpose of Financial Accounting?

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Companies and individuals use financial accounting for the purposes of preparing and presenting financial statements. They use these statements to determine the overall financial condition of the company or their personal finances.

Financial accounting for a business is generally done by an outside company, and several people receive the reports. The company's managing officers and the various stockholders and owners usually receive a copy. This allows everyone involved to see how a company is progressing in terms of profits and other economic goals. It helps companies to create new goals, to know where and when they should spend their money and to know whether or not their efforts are turning into profits.