BRANCHES OF ACCOUNTING - COMMERCEIETS

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• BRANCHES OF ACCOUNTING
  • • • FINANCIAL ACCOUNTING
      • MANAGEMENT ACCOUNTING
      • COST ACCOUNTING
      • INTERNATIONAL ACCOUNTING
      • HUMAN RESOURCE ACCOUNTING
      • SOCIAL ACCOUNTING
      • FORENSIC ACCOUNTING
      • TAX ACCOUNTING
      • PROJECT ACCOUNTING
      • GOVERNMENT ACCOUNTING

BRANCHES OF ACCOUNTING

The advancements and continuous evolution of the commerce, trade and industry in the world has lead to the increased scope of the accounting. As a result, the different Branches of Accounting come into existence which is as follows:

FINANCIAL ACCOUNTING

Financial Accounting involves preparation of accounting records for a particular period of time. The main purpose of this accounting is to ascertain the true profit and loss of the business as well as financial position of the firm. Its aim is to provide the financial information regarding the business to the different users on time.

It is also known as “General purpose Accounting” because the information generated is published for the use of everyone connected with the business enterprise.

MANAGEMENT ACCOUNTING

Management Accounting comprises of two words= ‘Management’ + ‘Accounting’. It is the study of managerial aspect of accounting. It is the presentation of accounting information in such a ways as to assist management in the creation of policy and the day-to-day operation of an undertaking. Its system uses historical as well as estimated data to generate useful reports and information to be used by internal management for decision making process. The tools and techniques of management accounting involves:

• Analysis of financial statements
• Ratio Analysis
• Budgetary Control
• Standard Costing
• Marginal Costing
• Decision Accounting
• Management Information System

COST ACCOUNTING

Cost Accounting is the application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control and the ascertainment of profitability. Costing is the classifying, recording and appropriate allocation of expenditure for the determination of the cost of products or services; and for the presentation of suitably arranged data for the purposes of control and guidance of the management. Its tools and techniques involves:

• Material Costing
• Overhead Costing
• Activity Based Costing
• Standard Costing and Variance Analysis
• Process Costing
• Job Costing
• Unit Costing
• Contract Costing

INTERNATIONAL ACCOUNTING

International Accounting may be defined as the branch of accounting which involves different accounting practices all over the world. It deals with particularly with technical problems in global operations faced by domestic and foreign operations. It is a discipline to develop a universal system of accounting which would be accepted by whole world that is harmonization and convergence of accounting standards. International Accounting involves:

• International Financial Analysis
• International Transfer Pricing
• International Taxation
• International Harmonization of Financial Reporting
• Foreign Currency Transaction and Translation

HUMAN RESOURCE ACCOUNTING

Human resource Accounting is that branch of accounting that attempt to identify and report investments made in human resources of an organisation that are presently not accounted for in conventional accounting practice, basically it is an information system that tells the management what changes over time are occurring to the human resources of the business. It is the identification, measurement, recording and reporting of costs and values associated with human resources of an enterprise.

SOCIAL ACCOUNTING

One of the Branches of Accounting is Social Accounting. Social Accounting is also known as Social Responsibility Accounting, Socio-economic Accounting, Social Reporting and Social Audit. It aims to measure and inform the general public about the welfare activities undertaken by the enterprise and their effects on the society. It is featured as:

• An expression of a company’s social responsibilities.
• Related to the use of social resources.
• Emphasize on relationship between firm and society.
• Determines desirability of the firm in the society.
• Emphasizes on social costs as well as social benefits.

FORENSIC ACCOUNTING

Forensic means ‘suitable for use in the court of law.’ So forensic accounting means an application of a specialized knowledge and specific skills to stumble upon the evidence of economic transactions. It is specially a practice area of accountancy that describes engagements that result from actual or anticipated disputes or litigation. Forensic Accounting:

• Emphasizes on suitability for use of evidence in the court of law.
• Is an application of a special knowledge and skill to find out the evidence of economic transaction.
• Is focused on reporting which is contained within an accounting system and legal framework.
• Emphasizes on establishing accountability of the guilty for misstatement or mismanagement of corporate affairs.

TAX ACCOUNTING

One of the Branches of Accounting is Tax Accounting. Tax Accounting deals with the tax related matters of a business firm. It includes computation of taxable income and presentation of financial or other information to tax authorities required by tax laws and regulation of a country. Tax accounting is also important for managers because taxes usually have a significant impact on the expected outcomes of the proposed decisions.

PROJECT ACCOUNTING

One of the Branches of Accounting is Project Accounting. Project Accounting is a component of overall project management. It is a specially designed accounting system that prepares financial reports at appropriate time intervals to track the financial progress of a project. These reports provide vital information to project managers in performing their project management function. The use of project accounting is very common among companies involved in construction contracts.

GOVERNMENT ACCOUNTING

Government Accounting is concerned with the allocation and utilization of government budgets. It ensures that the central and state government funds released for various purposes are being utilized efficiently. The proper record keeping makes the audit of completed projects possible.

Also Study	Also Study	Also Study	Also Study
Accounting	Non profit organisation	Depreciation	Liquidity ratios
Nature of Accounting	Receipts and Payments Account	Depreciation Accounting	Acid Test Ratio
Benefits of Accounting	Scope of accounting	Hire Purchase Accounting	Cash Ratio
Difference between cost accounting and financial accounting	Financial accounting, cost accounting and management accounting	Difference between hire purchase and instalment system	Financial ratio analysis
Difference between transaction and event	Transactions	Users of Accounting	Ratio analysis
Limitation of Accounting	Capital Expenditure	Instalment System	Difference between consignment and sale
Book Keeping	Revenue Expenditure	Reserves Accounting	Abnormal loss vs normal loss in consignment
Accountancy	Difference between capital and revenue expenditure	Provisions	Treatment of loss on consignment
Accounting as science or an art	Accounting Equation	Single entry system	Accounting treatment of consignment
Book Keeping vs accounting	Deferred Revenue Expenditure	Difference between statement of affairs and balance sheet	Joint venture vs consignment
Book keeping vs accountancy	Capital receipt	IFRS	Departmental Accounting
Accounting vs accountancy	Revenue receipt	Balance Sheet	Methods of departmental accounting
Basis of Accounting	Difference between capital and revenue receipt	Profit and loss Account	Allocation of expenses in departmental accounting
Branches of accounting	Difference between accounting concepts and conventions	Trading Account	Inter-departmental transfers
Cash and mercantile system of accounting	Accounting Standards	Voyage Account	Different types of branches
Accounting Principles	Objectives of Accounting	Accounting for Incomplete Voyage	Departmental vs Branch accounting
Golden ru les of accounting	Process of Accounting	Joint venture	Methods of branch accounting
Double entry system of book keeping	Scope of Accounting	Joint Venture Vs Partnership	Incorporation of branch trial balance
Double entry vs Single entry system	Accounting Concepts vs Accounting conventions	Methods of recording transactions in Joint Venture	Garner VS Murray Rule
History of Accounting	Difference between provisions and reserves	Consignment

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