Question

explain the different types of branches from accounting point of view
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Answer 1

ANSWER :

❖ The different types of branches from accounting point of view are as follows :-

• ❒ Financial Accounting : Financial Accounting is the branch of accounting which deals with the recording of business transactions in a systematic manner for the purpose of ascertaining the profit or loss of the business earned during an accounting period by preparation of a Trading and Profit and Loss Account and to present the financial position of the business by preparing a Balance Sheet. Financial Accounting branch of accounting provides information required by the management and various other parties interested in the business.

• ❒ Management Accounting : Management Accounting is another branch of accounting which is used to present the accounting information in such a way as to assist the management in planning and controlling the operations of a business. In management accounting, the management accountants use various techniques such as ratio analysis, budgetary control, fund flow statement, cash flow statement etc. as well as various concepts to make the accounting date more useful for the managerial decision making.

• ❒ Cost Accounting : Cost Accounting is the branch of accounting that is used to ascertain the total cost and per unit cost of goods produced as well as services rendered by a business entity. The cost in advance can also be estimated by Cost Accounting and it helps the management in exercising strict control over cost as well.

• ❒ Tax Accounting : Tax Accounting is a branch of accounting which is used for tax purposes. On the basis of this accounting branch, income tax and sales tax are computed. Hence, this branch deals with taxation matters.

• ❒ Human Resources Accounting : The art of valuing, recording and presenting the worth of human resources in the books of accounts of an organization is known as Human Resources Accounting. This branch involves measuring the cost incurred by the business to recruit, select, train and develop personnel, evaluate their economic value and report to management the changes occurring in this asset management may make use of this information for planning, budgeting and control of human resources.

• ❒ Social Responsibility Accounting : Social Responsibility Accounting is that branch of accounting which is aimed at identifying, measuring and communicating the contribution of a business entity to the society. In this branch of accounting, techniques have been developed for measuring the cost of these contributions and the benefits to the society.