What are the Branches of Accounting

 No matter how much money a businessman has, only then he can become a successful businessman. When he knows how to use accounting, he should know what are the types of accounting and what will be the benefits of using it. In today's post, I will talk about all these topics.

Branches of Accounting

Different types of accounting methods have been developed in business to serve a variety of purposes. These are also known as types of accounting or branches of accounting. There are mainly three types of writing which are given below-

1. Financial Accounting

2. Management Accounting

3. Cost Accounting

3 branches of accounting

1. Financial Accounting - Financial accounting is the accounting under which transactions of financial nature are accounted for. Profit-Loss Account (P&L A/C), Income Statement Account, and Balance Sheet are prepared on the basis of these accounts only.

In this way, the following are the functions of financial accounting –

1. To write the transactions related to the institution in the above-mentioned book.

2. Preparation of Income Statement Account, Profit Loss Account, and Balance Sheet.

3. To inform the business owner or related parties of the business results for a given period.

2. Management Accounting – Management accounting is the modern chain of accounting. When an accounting method provides necessary information for the needs of the management, then it is called a managerial accounting method.

3. Cost Accounting - Cost accounting is a subsidiary of the financial accounting method. This accounting is a system of recording the cost of a commodity or service in a systematic and scientific manner. This also controls the cost. Cost accounting involves determining the cost of each job or order, contract method, service, or unit.

4 branches of accounting

1. Human Resource Accounting (HRA)

2. Tax accounting

3. Government accounting

4. Social accounting

1. Human Resources Accounting –

 In the accounting world, a new system has started developing to evaluate manpower and display the financial results by recording them in the accounts. Which is called 'Human Resource Accounting. It is known as HRA in short form.

2. Tax Accounting - 

Tax accounting, the accounting used to calculate the correct tax on income is called tax accounting. Such as wealth tax, sales tax, gift tax, and death tax. e.t.c .

3. Government accounting - 

Government accounting, the accounting system adopted by the government to keep track of its income and expenditure is called government or state accounting. The government prepares a budget for its income and expenditure and works accordingly.

4. Social Accounting -

 Social accounting, ordering the economic activities of a nation in a proper way is called social accounting. These verbs are divided into different work-related classes. This method of accounting reveals the social, and economic changes in a country in a defined period in a big way, it is also called national accounting.

what are the Branches of Accounting

As you read in the above post, there are different types of accounting methods in a business to fulfill various activities and objectives. Which are used as per the requirement. In the true sense, there are three main types of accounting-

1. Finance Accounting

2. Management Accounting

3. Cost Accounting

how is accounting used?

There are many types of activities carried out in a business. The objective of the business is to earn more and more money and at the same time to maintain the demand of the customers. For this, the trader has to buy, sell and do many other activities. For this, he uses a ledger and keeps writing date-wise transactions in his business. That action is accounting.

Conclusion 

Here in this post, we discuss about Branches of Accounting so if you are an accounting student then you can check our article.

FAQ:

Q. 1:  how many branches of accounting?

Ans: 3