Accounting and Finance (Essay Sample)

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Accounting and Finance
This paper aims to describe the difference between accounting and finance with respect to emphasis on cash flow. From this perspective, accounting is a sub-function of finance, and it collects and records information about operations in business. It emphasizes on recording and reporting (Das, p.n.d). The key functional area by the end-product of accounting is financial income declarations, which include Income Statement, Balance Sheets, Comprehensive Income and Statement of Equity. All the declarations deal with profit and loss accounts, Changes in financial position, Funds declarations concerning with assets, liabilities and any outcomes are reported in reports.
Finance is any transaction, or a transfer of money that comprises cash inflow or outflow for the purpose of financing activity can be included in finance. One of the major differences between accounting and finance is associated with decision making and the treatment of funds. All the Revenues and expenses are assumed and are based on accrual accounting system. Revenue is recognized when it is realizable or realized at the point of sale and not at the time of collection. Expenses are recorded once they incurred only. However, in finance, recognition or determination of funds is based on cash flows (Nurnberg, pp. 1-7). Revenues are recognized during the cash-in, and expenses are acknowledged at the point of cash-out.
Statement of Cash Flows usually represents three types of activities.
Operating Activity
Investing Activity
Financing Activity
Any transaction of Cash inflow or outflow that represents business operations is record as an operating activity. Cash...