Difference Between Accounting and Financial Accounting

Accounting vs Financial Accounting

When it comes to choosing a course to pursue in a college or university, a huge majority of senior students are seeking business courses. This is because, apart from being awarded with an undergraduate degree that will get them into most multi-national companies after completing the academic program, completing a business academic program in a university or college will also give them the know-how they will need to start their own business, and for them to become their own boss.

The completion of an accounting degree program in a college or university is often viewed to be one of the most difficult business courses. However, it is the most rewarding, since it provides graduates with a number of different opportunities. Law firms highly value lawyers with an accounting undergraduate degree, because they will be able to assist their corporate clients. At the same time, multinational companies need the assistance of qualified accountants to prepare and help them present their financial status to their stakeholders, while providing sound suggestions and recommendations for future endeavors. It is no wonder then, that accounting is considered to be the language of business.

By definition, an accounting degree provides undergraduate students with the theories and principles of recording, classifying, summarizing and interpreting financial transactions of a particular entity. Over the years, accounting has extended from meeting the financial needs within the organization, to the organization of various groups of people, which includes the government, stakeholders and prospective clients.

To meet this demand for more specialized accountants, colleges and universities began to offer accounting degree programs that are more specialized, along with the general accounting degree programs that they have been offering over the previous years. Financial accounting is just one of the specialized fields of accounting. While this academic degree program still provides students with the same theories and principles that are studied in general accounting courses, financial accounting focuses on the application of these theories and principles, in preparing financial statements for groups of people outside the organization. This includes meeting the requirements of local government bodies, stakeholders, financial analysts and economists. The financial statements prepared by financial accountants are also used to attract potential and prospective clients. This is in stark contrast to general accounting degree programs, that provide training to students for the preparation of financial statements that can be used internally and externally.

Summary

1. Accounting and financial accounting are undergraduate business academic programs that help students to learn the principles of recording, classifying, summarizing and interpreting financial transactions.

2. Accounting degree programs are very general in their training, while financial accounting degree programs tend to be more specific and specialized in training undergraduate students.

3. Accounting degree programs train students to prepare financial statements that will be used to meet the internal and external financial reporting needs of a particular organization. On the other hand, financial accounting merely focuses on the preparation and summarizing of financial statements to meet the needs of groups of people outside the company, such as government agencies and potential investors.

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