2. Content: 1.Meaning 2.Objectives 3.Advantages 4.Limitations 5.Users of financial accounting 6.Basis of accounting 7.Reference

5. 4. To Provide Accounting Information to its Users: Financial Accounting provides all the necessary information related to business to its different users which helps them to make any particular decision. 5. To protect business properties: Financial Accounting keeps the proper records of all the Assets of the business which leads to protect the properties of the business. 6. To facilitate rational decision making: Through Financial Accounting the users who involve with the business can make rational decision by using recorded data.

7. 4. Helps in decision making process: Financial Accounting provides all the necessary information to its different users. Using these information they can make any further decision. 5. Valuation of assets and liabilities of the business: Financial Accounting helps to calculate the values different assets and liabilities of the business. Balance sheet is prepared at the end of the accounting period to record the values of assets and liabilities.

9. 4. Financial accounting does not provide timely information: the final accounts are prepared only at the end the accounting period, which means for the result and position of the business the users have to wait till the end date of the period 5. Financial accounting doesn't disclose the present values: financial accounting follows historical concept while recording the values of assets. Assets of the business are recorded on acquired valued not on the present values.

10. INTERNAL USERS EXTERNAL USERS EXTERNAL USERS

11. Accounting is a means by which necessary financial information about business enterprise is communicated and is also called the language of business. Many users need financial information in order to make important decisions. These users can be divided into two broad categories: internal users and external users. Internal users include: owner, Management, Employees etc, and External users include: present and potential Investors, Creditors, Government, research scholars etc.

12. Internal users: 1.Owners: to know the happenings of the business, the result of business i.e., profit or Loss, and the values of Assets and Liabilities of the business etc. 2.Management: they need the information to make further decisions related to business. 3.Employee groups: information on the stability, profitability and distribution of wealth within the business;

13. External Users: Investors and potential investors-information on the risks and returns on investments; Creditors-information on whether amounts owed will be repaid when due, and on the continued existence of the business; Customers-information on the continued existence of the business and thus the probability of a continued supply of products, parts and after sales service; Government and other regulators- information on the allocation of resources and the compliance to regulations; taxes, fines etc.

14. BASIS OF ACCOUNTING: 1. Cash basis: only cash transactions are recorded under cash basis of accounting. Cash receipts and cash payments are recorded. Credit transactions are not recorded at all and are ignored till the cash is actually received or paid. Cash book, Receipt and payment A/c are prepared under cash basis of accounting. 2. Accrual basis: under this system all transactions both cash as well as credit relating to a particular period recording in the books of accounts.

15. Reference: 1.Jain S.P.: “ADVANCE ACCOUNTANCY VOL- I KALYANI PUBLISHERS- NEW DELHI- 2007 2. DAM B.B. GAUTAM H.C.: “ACCOUNTANCY” CAPITAL PUBLISHING COMPANY- GUWAHATI- 2009 3. Tulsian P.C. Tulsian S.D.: Accountancy for Class XI S. CHAND AND COMPANY LTD.- NEW DELHI- 2011