In this article, we are going to explain the branches of financial accounting. In which include the Financial Accounting, Management Accounting and Cost Accounting.
Branches of Financial Accounting
These are the major and crucial branches of financial accounting. We will going to mentioned in the below section:
1. Financial Accounting
It is the branch of accounting that deals with the past data of the business. It is generally used for one year and ends with the preparation of Financial Statements like:
i) Profit and Loss Account indicating the profit earned or losses incurred during a particular period.
ii) Balance Sheet indicating the financial position, i.e., assets and liabilities held on the last day of the accounting period.
Financial accounting is also part of the branches of accounting.
2. Management Accounting
It is that branch of accounting that is forward-looking and futuristic rather than dealing with historical data and generally involves Cost Accounting and Budgeting. It aims to provide inside reporting to the manager of a company. Provisions of Generally Accepted Accounting Principles (GAAP) articulated by the accounting profession and other statutory provisions and accounting standards.
3. Cost Accounting
This branch of accounting deals with the costing aspect of business transactions. All the present and future costs are recorded, classified, and reported under Cost Accounting.
i) Define various constituents of cost, material, labor, and overheads.
ii) Determine the basis of cost measurement.
These are the main branch of accounting. We have explained it with simple words and you can also read the other article related to financial accounting.
Other Related Informative Articles
You can also read some other articles to enhance your knowledge:
1. To know about the Function of Financial Accounting.
2. The best Qualitative Characteristics of Accounting.
3. The best User of Accounting Information.