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Accounting is the measurement, processing, and communication of finance for different economic activities that are based on market conditions. Or we can say that it is science that is based on records and classifies business events and transactions. It collects and divides the financial characters and abilities to prepare the reports, stustudynd represent the transactions and events. After this, it provides the outcome to individuals who can make business decisions or provides an evaluation.
There are two kinds of accounting. The initial one is external accounting or financial accounting, and the other one is internal accounting or management accounting. The financial accounting is based on the double-entry bookkeeping that deals with the different chronologic data reports of general ledger accounts of the real business transactions. It meets with the requirements of the data by the external clients of accounting data. For instance, if an organization needs a bank loan, it is mandatory to show the organization’s financial statement to the bank.
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Cost accounting, as the name, refers that it is all about measuring the cost of everything that the business is spending to fulfill their daily tasks. The cost varies from business to business. The most common costs for the business are the manufacturing cost and the cost of the services. Cost accounting helps the business to analyze their types of cost. Cost accounting is quite helpful in day to day activity for the business.
Financial accounting is all about the operation of the financial assets of the company. In other words, it is used to keep track of the financial transactions of the company. It provides the best possible ways to manage these transitions under specialized guidelines. Thus the accountant recorded, summarized, and presented the financial report. Financial accounting involves the income statements and the balance sheet.
Managerial accounting is also known as management accounting. It is specially designed for managers and management-level employees. Thus, the managers use accounting information provisions. It helps them to inform themselves to make better decisions for the organizations.
Tax accounting is focused on the tax structure of the business. It helps the company to pay their taxes on time. It involves all the procedures to pay taxes to the government. Tax accounting is applicable to the individuals as well as the company.
Public accounting is all about finance that is related to the financial statements of the clients. It includes the preparation, review, and audit of the financial statements as well as tax-paying. It is used in B2B business models where one business provides the accounting service to another company.
Payroll accounting is related to the employees of a company. It is used to calculate, manage, and analyze the employee's compensation and remuneration. It is used to calculate the CTC of the employee. Some companies also apply it to calculate how much revenue the company is generating on its employees.
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