An accounting which records and measures the business transactions and is followed by generally accepted accounting principles is classified as ____________?
Correct answer: D. financial accounting
- A. external accounting
- B. internal accounting
- C. business accounting
- D. financial accounting
Explanation
Financial accounting records business transactions and prepares reports under generally accepted accounting principles for users such as investors, creditors and regulators. Internal accounting is designed mainly for management use and is not governed in the same way by GAAP.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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