ECONOMICS

Detailed explanation-1: -Financial accounting consider only those transactions which are of historic nature i, e the transactions which are already taken place. Futuristic transactions are of no value in financial accounting, not of any importance. Was this answer helpful?

Detailed explanation-2: -Accounting’s history can be traced back thousands of years to the cradle of civilisation in Mesopotamia and is said to have developed alongside writing, counting and money. The early Egyptians and Babylonians created auditing systems, while the Romans collated detailed financial information.

Detailed explanation-3: -Financial Accounting is the process of recording, summarizing and reporting transactions and revenue-expense generations in a time period. For example, investors or sponsors need to verify an account statement before showing interest in associating with the business.

Detailed explanation-4: -Financial accounting is historical accounting, looking backwards, whereas management accounting is forward looking.

Detailed explanation-5: -Another concern is that financial statements are entirely historical in nature, and so can be misleading when used to project the future results of a business.