Different Types of Accounting Branches
There are 5 Different types of Branches of Accounts They are namely:
- Financial Accounting.
- Cost Accounting.
- Management Accounting.
- Social Accounting.
- Inflation Accounting.
The main objective of financial accounting is to find out the profitability and to provide information about financial position of the concern.Financial accounts present a general idea of the working of the business and permits management to control in 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 financial statements,
- The profit and loss account of the firm during the period.
- The balance sheet-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 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 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 appropriate time to the management to enable it to take 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 which it collects form 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
Inflation accounting is a method of recording financial information in the financial statements at values which reflects the actual purchasing power of the monetary unit during time of inflation.Inflation accounting thus recognize a fall in the value of money due to inflation or rise in the general price level.