Branches Of Accounting
There are 5 Different types of Branches of Accounts are namely:
- Financial Accounting.
- Cost Accounting.
- Management Accounting.
- Social Accounting.
- Inflation Accounting.
1. Financial Accounting
The main objective of financial accounting is to find out the profitability and to provide information about the financial position of the concern. Financial accounts present a general idea of the working of the business and permit management to control in a general way the major functions of a business, administration, production, and distribution. But financial accounting does not give details regarding the operating efficiency of these divisions.
In financial accountancy, the information is expressed in two main types of financial statements,
- The profit and loss account of the firm during the period.
- The balance sheet-the the financial position at a particular date.
2. Cost Accounting
The main object of cost accounting is to find out the cost of the goods produced or services rendered by the business. It also helps the management to detect and control all leakages, defective works, and wastage in tools and stores.
Costing enables the management to compare the price of the product available from outside suppliers in the market with the cost of the product manufactured by them and explain whether it’s profitable to produce such a product or purchase it in the market.
3. Management Accounting
The primary objective of management accounting is to supply relevant information at the appropriate time to the management to enable it to make the decisions and effect control. Management accounting provides accounting information to the management to perform all its functions such as planning, organizing, staffing, directing, and controlling.
Management accounting provides accounting information, to the management in the form of processed data that it collects from financial accounting.
4. Social Accountancy
It is concerned with the application of double entry system of Book-Keeping to socio-economic analysis, with the construction, estimation, and analysis of national and international Income, National or International Balance sheet.
5. Inflation Accounting
It is a method of recording financial information in the financial statements at values that reflect the actual purchasing power of the monetary unit during the time of inflation. Inflation accounting thus recognizes a fall in the value of money due to inflation or a rise in the general price level.