VARIOUS BRANCHES OF ACCOUNTING

Various branches of Accounting are mentioned below.  such as-;

1) Financial Accounting

2) Cost Accounting

3) Management Accounting

1) Financial Accounting

Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. It is concerned with recording of business transactions in the books of accounts in such a way that operating result of a particular period and financial position on a particular date can be known. That is Financial Accounting enable to prepare Profit and Loss Account and Balance sheet which reveals the operating result and finanacial position of business entity of a particular period.

The purpose of finanacial accounting is not to report the value of a company rather it’s purpose is to provide enough information to others to assess the value themselves.

In the case of listed companies , it is mandatory to prepare and publish the financial  statements periodically. So inverstors in various parts of the world getting a chance to assess the operating results and financial position of the company.

In Finanacial Accounting , finanacial statements are prepared based on the the international accounting standards and Generally Accepted Accounting Principles ( GAAP).

In india finanacial statements are prepared based on Ind AS( Indian Accounting standard).

2) Cost Accounting

It relates to collection, classification and ascertainment of the cost of production or job undertaken by the firm. Cost accounting basically deals with determining  cost of units manufactured and service rentered. So it helps  manager to take decisions regarding the price of a prodcuct and  it helps to fix the price of the finished goods. Like wise it helps to ascertain the product wise profitability of a manautacturing unit.

That means with the help of cost accounting ,the managers can measure cost per unit and profit per unit and It enables to  introduce new cost reduction techniques  to minimize the manufacturing cost. Like wise It helps to reduce the cost per unit and increase the profit per unit. Ultimately  helps to reduce the cost of production and improves the profitability of  the entity.

3) Management Accounting

It relates to the use of accounting data collected with the help of financial accounting and cost accounting for the purpose of policy formulation, planning, control and decision making by the management.

Here managers collect the information by using cost accounting and finanacial accounting techniques and use these information for decision making and policy formulation.

Management accounting enables managers to take decision