If you are a business student then you should know basic points and knowledge about “Accounting”. In this post we will discuss all about accounting and “Accounting Concepts”.
Accountant
An accountant is an individual whose duty is to maintaining and analyzing financial documents. A person in charge of preparing financial statements. It records, summarize and analyze the accounting information without his personal interest ad done his job with honesty.
Accountant Role
An accountant is responsible for recording data, summarizing data, analyzing of data and give reports on financial statements or on financial position of a company or a business.
An accountant can work on financial analysis, he can take care of account receivable and account payable, He can make payroll and there are also other duties which an account can do.
Types of Accounting
Basically there are three types of accounting, which are following:
- Financial Accounting
- Management Accounting
- Cost Accounting
Financial Accounting
Financial accounting involves in recording transactions or events in monetary form. This is used to make financial statements such “statement of financial position and statement of profit and loss”.
Financial Accounting is very important because it provides the information related to a company’s performance and financial position.
Financial accounting ca help in makin or taking decision according to company’s position.
Management Accounting
Management accounting is used to make decision in the company, the main function of management accounting is,
- Planning
- Controlling
- Decision making
The management uses the “ACCURATE” information for taking or making any company’s decision.
- A=Accurate
- C=Cost beneficial
- C=Complete
- U=Understandable
- R=Relevant
- A=Available to use
- T=Timely
- E=error free and easy to use
Cost Accounting
“A structured set of methods for documenting measures of the cost of production items and performance of a service in the overall and in depth,”.
Cost accounting is a commercial activity that involves recording, examining, summarizing, and analyzing a production finances or cost incurred to on any procedure.
Cost accounting is a part of managerial accounting that estimates the true cost of an item’s production.
Standard cost accounting, lean accounting, activity-based accounting and marginal costing are all examples of cost accounting methods.
Cost accounting involves specifying fixed and variable costs.
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