Accounting refers to the process of keeping financial accounts of the business. Accounting follows a systematic process of summarizing, analysing and reporting these transactions to tax collecting agencies.
The types of accounting
- Financial Accounting
This field is concerned with the conversion of financial information into external reports. A person handling financial accounting requires detailed knowledge of the accounting framework such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Financial accounting statements include profit and loss statements, balance sheets, cash flow statements.
- Project Accounting
Different projects from the use of the Project accounting method to track down their progress from the financial perspective. This type of accounting plays an important part in project management.
- Managerial Accounting
This type of accounting mainly aims at gathering information that needs to be used for the internal working of a company. This contains an even more detailed report than the reports that are made for the externals users of the company.
- Government Accounting
Government accounting focuses on the financial reports of the Government activities to promote welfare in the form of several government services that are available.
- Forensic Accounting
This type of accounting involves recording various documents and preparing reports along the area of legal matters. Accounting skills are used to prevent any fraud and to analyse financial statements for a legal proceeding.
- Tax Accounting
This type of accounting mainly covers various tax-related compliances along with tax planning with the aim of preparation of tax returns. This includes the calculation of income tax and other taxes and also their timely payment to the tax authorities
- Cost Accounting
Various costs of production of different companies can be captured by using this type of accounting. All costs like input and fixed costs will be first assessed and then compared to the actual cost that is incurred by the company.
Accounting is the gathering of various accounts and recording them in a systematic manner. Accounting is done to maintain three main statements:
1) Income statement
2) Balance statement
3) cash flow statement.
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