There are several branches of accounting to maintain accounts at present. Different types of accounting that range from maintaining records, auditing to preparing income tax returns. Accounting professional trend to specialize in one of these field as their career option as accountant.
Branches of Accounting (or) Different Types of Accounting:
Here we will explain different branches of accounting or you can say various types of accounting to make you understand accounting in much more detailed way.
1. Financial Accounting: Under this accounting, primary focus is towards accuracy of financial data towards external reports. Accounting professionals with specialized in external reporting requires in-depth knowledge on accounting framework like IFRS (International Financial Reporting Standards), GAAP (Generally Accepted Accounting Principles), or government standards of the country such as Securities and Exchange Commission of USA, Securities and Exchange Board of India, etc. There is likewise regulator track, which requires join awareness of management and financial accounting. Financial accounting is one of the common branches of accounting.
2. Management Accounting: These branches of accounting are maintained by companies only for internal purposes. It’s in-depth information about company rather than the information available to the public. This information is use by an organisation to control and define strategic goals. Data may be used to structure budget planning, forecasts, organisation goals. Such types of accounting are maintained purely for the purpose of companies management strategic decisions.
3. Cost Accounting: Management accounting is further divided into cost accounting. Main purpose to maintain a cost accounting technique is to control and monitor effective cost of production. Such branches of accounting are mostly preferred by manufacturing companies for controlling and maintaining costs.
4. Public Accounting: Under this types of accounting, primary objective is to examine the financial statements and supporting documents of client companies. This assures that financial proclamations collected by customers genuinely exhibit financial position of an entity. Professionals who are involved in public accounting required in-depth knowledge on accounting frameworks and reviewing type of personality to become an audit partner.
5. Government Accounting: It’s one of the branches of accounting system which manages funds uniquely. It is also known as federal accounting. Time to time disbursement of cash for various expenditures offered on account of governmental services. These services are requested by a government entity. Governmental Accounting also maintains accounts for public sector companies. This financial and performance overview assist government in budgetary and various other decisions. Professionals need to have various different skill sets and specialized accounting within this area to accomplish government accounting.
6. Forensic Accounting: These types of accounting techniques are followed for examining and investigating disputed or lawsuit cases. Forensic Accounting plays a role of witnesses in courts of law for financial criminal or financial disputes cases. These accounting assess financial effect of loss or detection of financial fraud. Specialized forensic accountants are hired for cases like damage claims, insurance claims, suspect fraud and claims, business valuations or any other finance related matters.
7. Tax Accounting: All tax related matters are categorized into Tax Accounting. It is represented by the assessment rules recommended by the countries tax laws. Tax accounting rules, standards and principles are different than financial statement prepared for public reviews. Professionals with tax accountants then perform adjustments into financial statements with implementing standards and principles of tax accounting described under countries tax laws. This information is afterwards used for tax estimation and tax planning.
8. Project Accounting: Under this branches of accounting, financial reports and financial statements are been prepared to track the progress of the project. One of the main components of project management is to maintain project accounting. This will assist management in various decision making steps. Project accounting is the specialized branch of management bookkeeping focusing primarily on success of new launched projects. Those companies who want to keep track on projects rely on Project accounting for example: construction projects, road projects, bridge projects, rail projects, etc.
9. Social Accounting: A corporate Social Responsibility Reporting or Sustainability Accounting term refers to social branches of accounting. Primarily objective of organization’s behind implementing social accounting is to track environmental reports. Organization looks forward for social and ecological environmental reports. Social accounting is a new types of accounting followed by organizations these days. It is still under phases of improvement. Considering growing awareness about environment among public has lead organizations to maintain such kind of accounts.
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Basics of Accounting for Beginners
- Chapter 1: What is Accounting with Examples
- Chapter 2: Objectives of Accounting
- Chapter 3: Types of Accounts
- Currently Reading: Branches of Accounting
- Chapter 5: Accounting Process
- Chapter 6: What is Assets and Current Assets?
- Chapter 7: What is Liability and Current Liabilities?
- Chapter 8: What is Revenue and Expenses?
- Chapter 9: What is a Single Entry System?
- Chapter 10: What is Double Entry System?
- Chapter 11: What are Journal Entries? Format and Examples
- Chapter 12: What Is a General Ledger? Format with Example
- Chapter 13: What is a Trial Balance? Examples and Limitations
- Chapter 14: What is a Profit and Loss Statement or Income Statement?
- Chapter 15: What is a Balance Sheet? Definition, Format and Examples
- Chapter 16: What is Managerial Accounting? Role, Job and Objectives
- Chapter 17: Accounting Quiz – Basics of Accounting for Beginners Module
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