Branches of accounting

Accounting is not always about finance and records on buying and selling. There are branches of accounting. They are as follows:

Financial Accounting

Financial Accounting is commonly termed as Accounting. The American Institute of Certified Public Accountants defines Accounting as "an art of recoding, classifying and summarizing in a significant manner and in terms of money, transactions and events which are in part at least of a financial character, and interpreting the results thereof."  Reports are always subject to statutory audit and meant for the management as well as for shareholders and creditors of the business concern. The main focus is on recording and classifying monetary transactions in the books of accounts and preparation of financial statements at the end of every accounting period.

Also read: Golden rules of accounting

Cost Accounting

Chartered Institute of Management Accountants (CIMA) define Cost Accounting as "application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control and the ascertainment
of profitability as well as the presentation of information for the purpose of managerial decision-making."

Management Accounting

Management Accounting is concerned with the use of both Financial and Cost Accounting information to managers within organizations, to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions. Reports prepared are meant for management and as per management requirement.

Social responsibility Accounting

Social responsibility accounting is concerned with accounting for social costs incurred by the enterprise and social benefits created.

Human Resource Accounting

Human resource accounting is an attempt to identify, quantify and report investment made in human resource of an organisation that are not presently accounted for under conventional accounting practice.

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