What are the different branches of accounting?

Banking & FinanceFinance ManagementGrowth & Empowerment

The different branches of accounting are explained below −

Financial accounting

  • Records daily transactions and gives the financial picture of business.
  • Preparation of trial balances, profit and loss accounts and balance sheets.
  • Creditors, financial institutions, banks, etc., use this type of accounts.

Cost accounting

  • Record, present and do the analysis of manufacturing costs.
  • With the help of this account, management can control the production cost and prices.
  • Forecast by analysing actual cost to budget cost.

Management accounting

  • Gives information about business administration.
  • Budgeting, cost analysis, decision making.

Auditing

  • Prepares tax reports using financial statements.
  • External − Financial statements are scrutinized by external/independent parties.
  • Internal − Focuses on the companies' internal structure.

Tax accounting

  • Prepares and files various tax returns.
  • Minimizes tax, tax reporting.
  • Tax related decisions are implemented.

Fund accounting

  • Records non-profit business funds.
  • Different accounts are maintained for different sources.

Government accounting

  • Records government and state government funds.
  • Records utilisation of allocated funds.

Forensic accounting

  • This is also called legal accounting.
  • Settles the legal matters.
  • Damage calculations are also conducted under this type of accounting.

Fiduciary accounting

  • Third party handles accounts.
  • Trust accounting, estate accounting, etc.
raja
Published on 13-Jul-2021 12:32:41
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