Branches of Accounting :
1. Financial Accounting
2. Cost Accounting
3. Management Accounting
1. Financial Accounting :
Financial Accounting is concerned with the recording of business transactions in a set of books and the periodic presentation of the financial data recorded in the books of accounts, through financial statements like the profit and loss account and balance sheet, to outsiders like creditors, shareholders, employees, etc. In other words, it is accounting for revenues (i.e., incomes) and expenses and assets and liabilities of a business. In short, it is the accounting which is concerned with the profit or loss of the business for a particular period and the financial position of the business as on a particular date.
2. Cost Accounting :
Wheldon has defined cost Accounting as "the classifying, recording and appropriate allocation of expenditure for the determination of the costs of products or services, and for the presentation of suitably arranged data for purposes of control and guidance of the management". From this definition, it is very clear that cost accounting is the formal or special accounting mechanism for cost finding (i.e., ascertainment of costs of products or services), cost control, ascertainment of profitability of activities carried out or planned, and reporting (i.e., presentation) of cost data to the management for decision -making. In short, cost accounting is that branch of accounting which is mainly concerned with costing information, which is useful to the management for purpose of cost ascertainment and cost control.
3. Management Accounting or Management Accountancy or Managerial Accounting :
According to the Institute of Chartered Accountants of England and Wales, "Any form of accounting which enables a business to be conducted more efficiently can be regarded as management accounting".
In the words of Robert N. Anthony, "Management accounting is concerned with accounting information which is useful to management".
According to these definitions, management accounting is the art or technique of analysis and interpretation and presentation of facts, results and information revealed by financial accounting, cost accounting and other books and records kept by the business for the benefit of persons who are in charge of managing the business. In short, management accounting is the accounting which provides necessary information to the management for discharging its functions, such as planning, organising, directing and controlling more efficiently.
1. Financial Accounting
2. Cost Accounting
3. Management Accounting
1. Financial Accounting :
Financial Accounting is concerned with the recording of business transactions in a set of books and the periodic presentation of the financial data recorded in the books of accounts, through financial statements like the profit and loss account and balance sheet, to outsiders like creditors, shareholders, employees, etc. In other words, it is accounting for revenues (i.e., incomes) and expenses and assets and liabilities of a business. In short, it is the accounting which is concerned with the profit or loss of the business for a particular period and the financial position of the business as on a particular date.
2. Cost Accounting :
Wheldon has defined cost Accounting as "the classifying, recording and appropriate allocation of expenditure for the determination of the costs of products or services, and for the presentation of suitably arranged data for purposes of control and guidance of the management". From this definition, it is very clear that cost accounting is the formal or special accounting mechanism for cost finding (i.e., ascertainment of costs of products or services), cost control, ascertainment of profitability of activities carried out or planned, and reporting (i.e., presentation) of cost data to the management for decision -making. In short, cost accounting is that branch of accounting which is mainly concerned with costing information, which is useful to the management for purpose of cost ascertainment and cost control.
3. Management Accounting or Management Accountancy or Managerial Accounting :
According to the Institute of Chartered Accountants of England and Wales, "Any form of accounting which enables a business to be conducted more efficiently can be regarded as management accounting".
In the words of Robert N. Anthony, "Management accounting is concerned with accounting information which is useful to management".
According to these definitions, management accounting is the art or technique of analysis and interpretation and presentation of facts, results and information revealed by financial accounting, cost accounting and other books and records kept by the business for the benefit of persons who are in charge of managing the business. In short, management accounting is the accounting which provides necessary information to the management for discharging its functions, such as planning, organising, directing and controlling more efficiently.
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