Accounting

Some importance of Accounting are as follows-

• a- Keep a record of business transactions.
• b- Communicates results
• c- Meet legal requirement
• d- Facilitates decision making for organization.

There are two types of accounting which can be classified into

a- Financial Accounting-

The accounting which involves the preparation or making of accurate and reliable financial statement is known as Financial Accounting. The main focus of financial accounting is to measure the performance of organization, firm, business or company. There are many accounting standards and principles such as International financial reporting standards, US Generally Accepted Accounting Principles or Indian Accounting Standard which are widely working in India. The accounting standard are so much importance because It brings uniformity and easy interpretation in the financial statements from year to year.

b- Managerial Accounting-

Managerial Accounting is the process which analyzes the information collected from Financial Accounting. It also refer to the process of preparing reports from financial accounting. This accounting helps to organization for making future plan by analyzing the financial statement and making tactical and strategic business decisions.

The example of Managerial Accounting is Cost accounting which helps to control the cost of a particular product and it also helps in breakup of cost.