logo
logo
Sign in

Various Branches of Accounting

avatar
jyoticalinfo
Various Branches of Accounting

Numerous fields of accounting have evolved due to economic, industrial, and technological advancement. It is believed that all accountants are tax agents and auditors, but this is not the complete truth. A huge number of accountants who work in businesses play different roles for different organizations.

 

Various branches of accounting are responsible for the different professional accountants and their different roles in the business sector. Each branch has its own unique features and specialization.

 

Do you want to know the branches of accounting?

 

Don't worry; in this blog, we will go through all of them with the purpose and role in the business world. But before that, we should know what accounting is.

What is Accounting?

 

Accounting is a process in which the financial transactions of a business organization are summarizing, analyzing and reporting. The accounting is useful to the internal and external users. 

 

Internal users can predict the trends and changes, and external users get to know about the performance of the companies such as shareholders, investors, etc. Accounting helps business owners to make critical decisions regarding business growth.

Branches of Accounting

 

Finance Accounting

 

Financial accounting is the real form of the process of accounting. It is a systematic method where the recording of the transactions is done as per the accounting rules or principles.

 

It aims to find out the profit and loss of business organizations in a definite period of time and provide a picture of your business's financial status. The financial accounting principles are profit and loss accounts, trial balance, and balance sheets. Financial accounting is mainly used by creditors, financial institutions, and banks.

 

Managerial Accounting

 

Managerial accounting focuses on providing a company's operation data to managers and is also known as the management accounting. Managers need some sort of data that is useful in the decision-making process regarding business operations.

 

It includes the operations such as budgeting, forecasting, cost analysis, financial analysis and analyzing past business decisions, and many more. 

 

The business owner and management team can make effective decisions with the help of valuable information about various business activities. Cost accounting is a type of managerial accounting.

 

Cost Accounting

 

As we have mentioned earlier, cost accounting is a type of management accounting. Cost accounting plays an important role in the various manufacturing industries where they need to manage cost and resources.

 

We can determine the cost of a product and service with the help of the cost accounting process. The main purpose of cost accounting is to assist the management team in fixing the prices and regulate the production cost. 

 

It caters to the company's fixed and variable costs. It also encounters defects, leakages, and wastages while manufacturing and making products. Apart from this, cost accounting deals with recording and analyzing manufacturing costs.

 

Tax Accounting

 

Tax accounting deals with the tax activities that include tax time and tax returns planning. Its focus is on how to reduce the amount of taxes legally. It helps to determine the income tax and the amount of other taxes.

 

In addition, it supervises other tax-related decisions and issues. It includes the functions such as tax preparation and filing and deals with the legal implications of tax returns.

 

Tax accountants help the organizations to reduce the tax amount and prepare the financial tax reports. Tax accounting includes the tax impacts consultancy by determining the effects of the taxes on different aspects of the business.

 

Forensic Accounting

 

This specialized field of accounting is growing day by day. It mainly focuses on legal issues like fraud injuries, claims, and dispute resolutions.

 

When the records are not complete, forensic accountants reconstruct them in order to convert a cash accounting system to accrual accounting. Forensic accountants deal with projects according to accounting tools. It is also known as legal accounting as it works on legal matters. 

 

In order to detect frauds and mismanagement cases in an organization, forensic accounting comes into the picture.

 

Fund Accounting

 

In fund accounting, different fund accounts are kept for different purposes, such as X fund account for fundraisers for orphan children and Y account for fundraisers for the widows. Non-profit organizations mainly use fund accounting. It ensures that the funds are utilized for the right purpose or not.

 

Government Accounting

 

This field of accounting is focused on the national or state government for the budget allocations and their utilization. Government accounting aims to prepare the proper records and utilization of the budget allocations and their safety.

 

Fiduciary Accounting

 

Fiduciary accounting aims to manage property of a person or business. The fiduciary accountant is responsible for managing the account or practices regarding the guardianship of property and administration.

 

Conclusion

 

In this blog we have shared some branches of accounting that have their own features and different purposes. Accounting is a worthwhile field for the students who want to make their career in the accounting profession. I hope now you know the accounting branches and their roles in our daily and professional lives.

collect
0
avatar
jyoticalinfo
guide
Zupyak is the world’s largest content marketing community, with over 400 000 members and 3 million articles. Explore and get your content discovered.
Read more