Accounting is an inseparable part of a business. It acts as the backbone of any company. All the financial functioning of a business is solely done by the accounts department. This itself portrays how important accounting is in the field of business.
There can be many types of accounting. Accounting also differs from business to business based on the scale of reach. This article discusses the various perspectives of accounting which every business firm should acknowledge.
Types of Accounting
The practice of recording the financial transactions of a business is known as Financial Accounting. It categorizes the data in various heads and stores it accordingly. Financial Accounting helps in the generation of the Income Statement, Balance Sheet and Cash Flow Statement.
Cost Accounting is especially connected to the manufacturing industry. It is the process of recording and analyzing the financial transaction of the manufacturing industry. It takes into consideration the fixed cost and variable cost of the company to study the impact.
Auditing is the process of studying the financial statements and position of a company. It is divided into two heads- Internal and External.
As the name suggests, managerial accounting is the process of providing financial data to the managers. This, in turn, helps the managers to analyze the data and make a proper plan of action for the growth and prosperity of the company.
The process of tax analysis, and calculating tax returns is known as Tax Accounting. It can help a business to keep a record of the taxes it is paying and how it can become for a reduced or managed. It also studies the various tax-related business decisions. Many tax consultancy services offer their services to the business firms and even individuals for tax accounting services.
Forensic Accounting deals with the legal affairs of a company. It helps to detect fraudulent affairs and works on resolving it. It also helps in the reorganization of incomplete data.
Fiduciary Accounting is a comparatively new field of accounting that deals with the management of assets or property of some other person or business. It deals with the guardianship, estate accounting, trust accounting, etc.
The above were some of the branches of accounting which every business firm should consider. These accounting branches help in the overall development of a business. Accounting stays as an integral part of the corporate world. These branches of accounting deal with the various aspects of a company and help in the integration and development of the company.