"Financial accounting is a specialized branch of accounting that keeps track of a company's financial…

Financial accounting is the oldest and most fundamental branch of accounting — indeed the term "accounting" generally refers to it — and it is concerned with recording, summarizing and presenting financial transactions through financial statements such as the income statement, balance sheet and cash flow statement. The statement in the question is correct, and can be discussed under its position among the branches, its features, objectives, scope and limitations.

1. It is one branch among several: accounting has developed into distinct branches — financial accounting, cost accounting, management accounting, human resource accounting and social accounting — each serving a different information need, which is why financial accounting is described as a "specialized" branch.
2. Its specialization lies in external reporting: unlike cost and management accounting, which serve management internally, financial accounting mainly aims to communicate statements to external users, and therefore follows standardized guidelines and principles.
3. It keeps track of transactions through three statements: the income statement ascertains the operating result (profit or loss) of a particular period, the balance sheet shows the financial position on a given date, and the cash flow statement shows the position of cash flow during the period.
4. It records financial transactions only: it deals only with transactions expressible in monetary terms — it records the purchase of goods for cash but not an event such as low employee morale.
5. It is a continuous process: the tracking of transactions is carried out regularly and systematically, not occasionally.
6. It does more than record — it analyses and interprets: besides recording, financial accounting analyzes and interprets the results, which distinguishes it from mere bookkeeping.
7. It is historic in nature: since it records only past transactions it is also known as historical accounting, whereas cost and management accounting are futuristic in direction.
8. It is based on GAAP: it rests on generally accepted accounting principles, which enables uniform preparation and presentation of financial statements and makes them comparable across firms.
9. Objective — to maintain records of transactions: its first objective is keeping proper records of financial transactions for future reference, normally in personal, real and nominal accounts — precisely the "keeping track" the question refers to.
10. Objective — to ascertain operating results and financial position: to find the profit earned or loss suffered in a period through the income statement, and to show the status of assets and liabilities on a particular date through the balance sheet.
11. Objective — to avail information to users and determine tax liability: it makes information available to investors, creditors, government and society, and provides tax authorities the basis for determining tax payable.
12. Its scope extends beyond business: it applies not only to profit-making business organizations but also to non-profit organizations such as hospitals, clubs and educational institutions (which prepare income and expenditure accounts and balance sheets), to government (as government accounting) and NGOs, and to professionals and individuals for measuring their activities and for tax purposes.
13. Limitation — monetary and price-level: it excludes qualitative elements such as management reputation, employee morale and labour strikes, and makes no adjustment for changes in the value of money over time.
14. Limitation — subjectivity and cost behaviour: balance sheet figures may be influenced by the personal judgment of the accountant; further, expenses are not assigned to the product at each stage of production nor classified into direct and indirect, so cost control cannot be achieved through financial accounting alone.
15. Limitation — limited analysis and control: it does not analyze losses due to idle plant or seasonal fluctuations, does not help management decide on expansion, dropping a product or alternative production methods, and provides no proper system of controlling materials and supplies — which is exactly why cost and management accounting emerged as further specialized branches.

Hence the statement is justified: financial accounting is indeed a specialized branch that systematically keeps track of a company's financial transactions and reports them to the outside world — though its historical, monetary and external focus is also the source of its limitations, which the other branches of accounting were developed to overcome.