Types of Accounting in Business
Explore the crucial role of Financial Accounting, Cost Accounting, and Management Accounting in conveying essential information for business stakeholders. Financial Accounting focuses on reporting financial results, Cost Accounting aims at cost control, and Management Accounting supports decision-making.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
Accounting is the language of business which is used to convey information pertaining to business activities for different stakeholders. It is commonly known as the art of recording, classifying, summarizing and reporting business transactions. Three broad category of accounting has been seen in financial literature that is Financial Accounting, cost Accounting and Management Accounting. Financial Accounting is primarily concerned with the recording of business transaction so as to report financial results to different user of accounting information. Whereas cost accounting aims at ascertaining and estimating cost of goods or services to facilitate cost reduction or cost control. Management Accounting facilitates the decision making.
TYPES OF ACCOUNTING Financial Accounting Cost Accounting Management Accounting
Financial Accounting It deals with recording business transactions to provide information to its stakeholders e.g. creditors, shareholders, government, consumers, etc. The primary objective of financial accounting is reporting financial results to different users. To convey financial reports, final account are prepared which primarily comprises of Income statement and Balance sheet. Income statement is prepared to assess the impact of business transactions on Profitability whereas Balance sheet is prepared to show the financial status of business unit at a particular point of time. The most significant contribution of financial accounting lies in its role of facilitating the function of directing and controlling by presenting the true and fair picture of financial status. It lays the foundation on which other branches of accounting are based. Financial Institutions,
Cost Accounting Cost accounting aims at accumulating and ascertaining the cost of a particular product or activities. The product, function, job or process for which it is ascertained is known as cost centres. It provides a detailed breakup of cost of different departments, processes, jobs, products, sales territories, etc. It is an accounting which facilities cost control and cost reduction by providing detailed information related to cost. It ensures proper utilization of resources by maintaining the records of cost data.
Management Accounting Management Accounting facilitates informed decision making by providing accounting information in a conducive way. It facilitates policy making and routine business operations by providing financial information. The basic purpose of management accounting is to communicate accounting information according to the specific needs of decision makers. It helps in Planning, decision making and controlling. It also facilitates performance evaluation by settings standards and comparing actual with standards e.g. in case of variances. It is projective in nature Unlike the first two branch of accounting with deals with the historical data.
