It reports on the transactions that affect an entity through number reports. Usually, these reports are in terms of dollars.
Financial accounting is very important to our economy.
Many people, such as investors and lenders, need information to help them make informed decisions. For example, an investor is a person with money who wants additional income. The investor sometimes has the opportunity to buy stock in a particular company. A company prepares financial reports, financial accounting's product, to inform investors and other interested parties about its financial performance. The principal financial reports are the income statement, balance sheet, and statement of cash flows.