Base of Differences Statistics Financial Accounting 1. Definition Statistics means to collect data, analyze it and convert it in useful information for new planning. Financial accounting is to record and summarize the financial transactions. 2. Field In statistics, we collect not only the data relating to business but we collect the data from different field like the data of population, earning, age and other. This is collected for taking economic decision. In financial accounting, we just use the business raw data. This is recorded for knowing income and financial position of organisation. 3. Example For example, we help the poor community of India through Govt. Fund. For this, we have to collect income data of whole Indian people. After this, we have to calculate average of it. As a good statistics, we have to exclude very higher earning community which is almost the 10% of total population of India. For example, a business started on the 1st April, 2012 and today is 25th June, 2012. We are interested to know what is the total amount of profit which our business has earned in april, may and june. For thils, we have to pass all the transaction which happens in these months. Every accounting software will easily tell us our is the profit of these months. If it is good amount, otherwise, we can change our different business policies. 4. Uses Statistics different tools like average, standard deviation, co-relation, variance can easily be used in financial accounting. Financial accounting’s information can also used for statistics. Every financial accounting’s information can be utilized for statistical analysis. For example, we want to analysis the demand of Indian customers for consumable products. For this, we have to take the 5 years profit and loss account of companies which sells consumable products.. After this, we have to take the information of sales. This sales is the demand of customers.
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