Accounting is a system in which all the financial transaction are recorded in a proper and systematic way.
Accounting is the art of identifying, recording, 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 result thereof.
OBJECTIVES OF ACCOUNTING
- To keeping systematic records.
- To ascertain the result of the operation.
- To ascertain the results of the operation of the business.
- To portray ( show/describe ) the liquidity position.
- To protect business properties.
- To facilitate rational decision-making.
- To satisfy the requirements of law.
BRANCHES OF ACCOUNTING
1. FINANCIAL ACCOUNTING:
It is concerned with recording and processing the financial transactions which affect the financial position of the business. It leads to the preparation of income statement and position statement of the business.
2. COST ACCOUNTING:
Cost accounting is concerned with the recording, classifying and appropriate allocation of expenditure for the determination of the cost of products or services and for the presentation of suitably arranged data for purposes of control and guidance of the management.
3. MANAGEMENT ACCOUNTING:
It is concerned with the collecting systematically and regularly all such information as will help management in discharging its functions of planning, control, decision making, etc. this is also named as accounting for management.