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Financial accounting is the branch of accounting those records, summarizes and reports the information about the various transactions a business has experienced within a specific period of time. Keeping this data helps the company to effectively prepare financial statements such as cash flow statement, income statement, and balance sheet to show how it has been performing. Financial accounting is important to any business because:
- It enables the business to create and maintain budgets
- It helps an organization to buy different goods from other organizations
- It enables the business to evaluate and create sensible financial reports
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