TERM ACCOUNTING
Accounting is the assessment, collection and distribution of financial and non-financial data on firms and organizations. Reporting can include financial accounting, executive accounting, independent auditing, tax reports and cost accounting in a number of fields. Data management systems are designed to promote compliance and related activities.
MENTION SIX BRANCHES OF ACCOUNTING
i. Management Accounting: The accounting division provides managers with data to enhance management of the company. This facilitates the decision-making and leadership of different business practices. With the help of different management data systems, such as budgets, projected cash flow, fund flow statements, variance analysis report, cost-volume-earnings reporting, breakdown-even-point calculation, etc., management can make efficient decisions.
ii. Financial Accounting: Financial Accounting is based on a systematic method for recording the accounts transactions of each company. The accounting method is the original form. The main purpose of financial accounting is to measure a business ‘ profit or loss over a duration and to provide an accurate picture of the company’s financial situation as of a specific date. The economic reporting refers to the company’s case sheets, income & loss reports and balances sheet.
iii. Cost Accounting: Cost accounting assesses the cost of the offered product or service. It calculates the cost in light of all factors, both manufacturing and administrative, that contribute to the production of output. Price accounting is designed to aid managers with value estimation and production cost containment
iv. Tax Accounting: Tax Accounting discusses issues relating to taxes. The roles involve planning and reporting and discussing the legal implications for various tax returns. Tax accountants aim to reduce tax payments and support fiscal accountants manage the tax reporting assets of specific jurisdictions.
v. Forensic Accounting: Forensic accounts sometimes referred to as legal accounts allow the calculation of judgments and/or resolution of legal disputes. There are reviews and estimates to correctly assess the damage.
vi. Government Accounting: It refers to revenue allocations and implementation of Central Government (National Government) and State Government. Keeping records guarantees that different expenditure funds and public funding protections are properly and efficiently utilized.
ACCOUNTING INFORMATION ARE USEFUL TO MANY USERS- MENTION FIVE USERS OF ACCOUNTING INFORMATION THAT YOU KNOW.
i. Management, ii. Creditors, iii. Regulatory Agencies, iv. Government, v. Potential Investors.
i. Management: The ownership and management roles of large business organizations are divided. The administration of such issues is more concerned with responsibility to stakeholders for better performance of their complaints.
ii. Creditors: The short-term and long-term position of the company is of interest to trading creditors, debenture holders, bankers, and other lending institutions. For this reason, the financial statements provide the necessary information.
iii. Regulatory Agencies: Different governments and other entities utilize accounts not only to determine taxation but also to analyze how different corporate issues run within the regulatory framework.
iv. Government: Governments all over the world are using financial statements for compiling statistics concerning business units, which, in turn help in compiling national accounts.
v. Potential Investors: To assess the relative merits of different investment options, shareholders use the data of accounting statements to a greater extent.
ACCOUNTING INFORMATION USEFUL TO:
–A prospective buyer?
The prospective buyer, though, wants accounts of its suppliers to determine if they have the necessary resources available to provide goods or services consistently in the future. For every enterprise, continuous provision of quality inputs is necessary.
-Worker or Staff of an Organization
Employees use accounting information to determine the financial health, sales volume and market performance of businesses in order to evaluate their job security, future wages, pension benefits and employment opportunities. The use of accounting information is usually part of their job description for employees working in the finance department. Of example, this involves the planning and analysis of various financial documents, of instance financial statements.
Employees are interested in knowing how well a company works, as it can affect the security and income of their jobs.
Throughout fact, potential workers are also interested in learning about the organization’s financial health, which they want to support in the future.
Many employees check the annual report for accounting information to gain a better understanding of the enterprise.
The increase in the number of acts and stock options plans in recent years has prompted a greater interest in accounting data by employers, especially in start-up companies.