Explain how accounting is used to track and monitor economic events that impact capital markets
Financial accounts play a vital role that allows businesses to keep a track of all the financial transactions. It is the process where companies can record as well as report the pieces of the data that goes out or comes in of the business operations which can allow both the managers of the company and the outside investors and analysts to understand the health of the company and make decisions.
It involves recording, summarizing, and reporting the flow of transactions and the economic activity that results from business operations for a specific period of time. It is governed by a standard set of practices, the end product of the financial accounting is the set of official company statement that includes a balance sheet and income statement. These statements are used by the managers of the company, investors, analysts, lenders, and other stakeholders for making informed decisions.
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