Branches of Accounting
Let’s learn about the branches of accounting. Mainly accounting has three branches. The one branch is co-related to other branches, No one branch can work independently. The performance of one branch is dependent on others.
Financial Accounting: This branch of accounting is concerned only with the financial affair and financial result of the company. Financial accounting is the process of recording, summarizing and reporting a company’s business transactions through financial statements. These statements are the income statement, the balance sheet, the cash flow statement and the statement of retained earnings.
Cost Accounting: This branch basically deals with the cost concept of accounting, the objective of this branch is to analyze the expenditure involved in the manufacturing of various products and to fix their prices. Cost accounting is a form of managerial accounting that aims to capture a company’s total cost of production by assessing the variable costs of each step of production as well as fixed costs, such as a lease expense
Management Accounting: This was developed with the emphasis on using detailed information as direct aid to the management in the decision-making process. The main purpose of management accounting is to provide necessary information about funds, cost, profits, etc. as well as with the preparation and presentation of accounting information in a way that enables the management to discharge its function properly.
The following can be illustrated in the below diagram.
