Accounting: It is the recording and tabulation of the inputs and processes that represent economic events according to a specific system, the financial information used mainly by managers, investors, tax authorities and other decision makers, with the aim of distributing resources within institutions, companies, organizations or the government.
Accounting name was derived from the use of the word financial account.Accounting is the science that studies the measurement, delivery and interpretation of financial activities by recording, classifying and summarizing financial operations, presentation and disclosure of financial information through financial statements prepared for specific periods of time (usually quarterly). Accounting is also known as the “language of business”.
The goal of accounting in general is to provide financial information and the most important of these information:
1. Determining the result of the activity of the economic unit during a certain period of time (profit or loss).
2. Determining the financial position of the economic unit (the company), which is represented in the sources of the unit’s funds from where they were obtained and the uses of these funds at the end of this particular time period.
3. Knowing and calculating the net cash flows of the economic unit during the same specific time period.
4. Record all operations of the economic unit.Providing a means to control the financial operations of the economic unit, especially monetary transactions.
Types of accounting.
1. Financial Accounting.
One of the types of accounting is “ financial accounting ”, which is the process of compiling financial reports for external use.Financial accountants work with colleagues and their managers to develop a strategy for how a company can be more profitable.
It also tracks all financial activities recorded in the financial ledger.In addition to ensuring that internal procedures are followed and all financial activities are included in the relevant financial statements.It must comply with generally accepted accounting principles established for the business sector .and IFRS if a company operates abroad.
In general, financial accountants need close attention to detail to inform external sources of the current financial condition.In financial accounting, one of the most important types of accounting is related to the collection of financial information in external reports.
Financial Accounting Requirements.
Require the types of accounting and financial accounting in particular a detailed knowledge of the accounting framework used by the company ‘s financial data reader.such as GAAP or IFRS, or if the company is publicly owned.
It requires knowledge of the standards issued by the government entity responsible for reporting public companies in a particular country.There are several career paths involved in financial accounting.
A specialization in external reporting usually involves a detailed knowledge of accounting standards.
There is also the Controller track, which requires a standardized knowledge of financial and management accounting.
2. Accounting administration.
One of the types of accounting is “management accounting.” This type of accounting documents monitors and assists in the financial planning of an organization.Its documents are usually reserved for internal stakeholders rather than the public.
The management accountant must be careful in communicating confidential information and to whom.
They work with their managers to analyze and develop a budget to meet the needs of the organization’s goals in the short and long term.This is one of the most secret types of accounting .
3. Cost accounting.
One of the types of accounting is “cost accounting.” Cost accounting can be considered a sub-category of management accounting.
Cost accountants are responsible for documenting, presenting and reviewing manufacturing costs.It oversees all variable and fixed costs to see if output corresponds to the cost of producing a product.
It also works with managers to make decisions in the future based on financial projections and production progress.
4. Reference accounting.
One of the types of accounting is “reference accounting” and internal and external audits fall under the category of general accounting.
An external audit is a procedure taken by a company that provides financial statements to a third party to obtain financial feedback.In this case, the third party is a reliable source in describing whether the company’s financial statement represents GAAP.
The internal audit determines the effectiveness of the internal accounting processes.The internal auditor can review departmental staff responsibilities, administrative policies, and related project approval procedures.
They in turn provide useful feedback which will help the company in gaining more profit and efficiency.
5. Tax accounting.
One of the types of accounting is “tax accounting.” Tax accountants help businesses comply with annual tax laws.When it provides its services every year.
It also helps companies plan for future tax returns, such as avoiding certain tax burdens and understanding the implications of specific tax decisions.
Larger organizations usually hire a tax accountant to examine the intricacies of financial records.
Computational Information Systems.
Accounting information systems manage the improvement of successful accounting procedures.
Staff working in this field decide the best times to install up-to-date technology and monitor progress in existing systems.
To determine if there has been an increase in productivity during a given time frame.They can make decisions in cooperation with the IT department in order to establish continuity in technological operations.
6. Fiduciary accounting.
One of the types of accounting is “fiduciary accounting” which is the procedure of trusting one individual to process financial accounts.
Accountants of this type are obligated to act on behalf of their clients for accounts linked to real estate, trusts, investments, and others.They must also provide relevant financial information to their clients once a year.
It includes a summary of all accounts, schedules of receipts, gains and losses and assets at their disposal.
7. Criminal accounting.
One of the types of accounting is “forensic accounting,” which requires accountants to reshape the company’s financial information.When some information is missing or not available for review.
The objective of forensic accounting is to collect all available documents and to accurately and comprehensively record all credit, debit and cash transactions in the financial statements.
These professionals often work on legal cases involving fraud, claims and disputes.
8. Public accounting.
One of the types of accounting is “general accounting,” which means a business that provides accounting advice to its clients based on their needs.
They can work in audits and help with tax returns.Consulting on procedures designed to install technological or computer software, and providing legal advice.
9. Government accounting.
One of the types of accounting is “government accounting,” and government accountants manage financial planning.and allocating resources to departments within local, state, or federal government.
This type of accounting has standards that must be complied with by the government council.Accounting Standards responsible for establishing consistent accounting procedures for local and state governments.They also monitor the government’s budget and allocate funds appropriately.
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