Understanding Financial Accounting
Financial Accounting is one part of accounting relating to the presentation of the company's financial statements to external parties in the form of balance sheet, income statement, Changes in Capital and Cash Flow to shareholders, creditors or investors, especially regarding profitability and credibility of the company, to suppliers, and the government .
Main Function of Financial Statements for External Parties
Shareholders, information that allows them to assess the company's ability to pay dividends.
Investors, Investments are very vulnerable to risk, they really need financial data information whether the funds they invest are feasible (Feasible) or not.
Creditors, Information to assess a company's ability to pay service fees and repay principal debt when due.
Supplier, information to assess whether their sales bill will be paid by the company when due.
Government, Information regarding tax policy determination and national income statistical data.
Stages in Learning Financial Accounting
Introduction to Basic Accounting, Understanding of the Fundamentals of Accounting Basics, Accounting Cycle, Compilation of Account Codes (Chart of Accounts), Recording of Transactions and Estimates, General Journal (General Ledger), Making of Worksheets of Financial Statements.
Intermediate Financial Accounting, Cost Accounting, Preparation of Financial Statements (Examples of Financial Accounting Reports), Understanding of Accounting and Financial Procedures, including Policies and Procedures: Cash and Cash Equivalents, Inventories, Receivables, Fixed Assets, Debts and Taxes.
Advanced Financial Accounting, Learning about the Formation of Partnerships or Mergers, Integrity of Presentation of Financial Statements, Analysis of Financial Statements, Compilation of Consolidated Financial Statements, Changes in Share Ownership, Consignment Sales, Liquidation of Installment Sales, and Stock Investments.
Financial Accounting Standardization
The financial statements that are presented should be in accordance with generally accepted accounting principles or in accordance with the Statement of Financial Accounting Standards (PSAK) regarding accounting instructions and procedures that contain regulations regarding the recording, preparation and presentation of financial statements referring to theories about the interpretation and deep reasoning by an institution called the Indonesian Institute of Accountants (IAI).
PSAK began to be implemented in Indonesia in 1994, but in the development of the preparation of accounting standards in Indonesia by the Financial Accounting Standards Board (DSAK), it cannot be separated from the development of international accounting standards prepared by the International Accounting Standards Board (IASB).
International Financial Accounting Standards in the process of full convergence with the International Financial Reporting Standards (IFRS) issued by the IASB, a financial reporting standard that can be accepted internationally and began to be applied in Indonesia since 2012.