Accountancy
is the art and science of recording,
measuring, processing and presenting the value able financial information about
economic entities such as business and cooperation’s. Accountancy is further
divided in to many different sub fields.
The three main accountancy fields are financial accounting, management accounting
and cost accounting. Their definitions and main features are as follows:
|
Financial
Accounting
|
Management
Accounting
|
Cost Accounting
|
|
“Financial Accounting deals with reporting to
the higher level of management and to external users. Normally financial
statements produced with the GAAP standards. Financial statement has a historical
cost”.
Basic purpose is to give purpose information to
the stakeholders.
Follow Standards like GAAP, IAS and IFRS to
present the accounting data in a meaningful information form.
It focus on product or service market value, book
value, and in costing like historical cost.
|
“Management Accounting is deals with the
reporting to internal stakeholders . The main purposes is to produce the
reports and improve the organizational decision inking”.
The Purpose of management accounting is to define
or measure the resources and their purposes in monetary terms.
The Measurement is not itself operation it become
operational when it modified with the same purpose.
We can say that management accounting is future
oriented
|
“Cost Accounting support both Managerial Accounting and Financial Accounting
on the basis of information which they
need to acquire or consume some resources for business use and manufacturing
concerns in terms of costing.”
Cost Accounting provide the base to both accounting sub fields to
report to the external and internal users.
Cost is often use for valuation.
It defines the cost, its purpose and the forces that drivers to wards
it that are mostly known as cost drivers.
|
These are the some of the basic features of these sub
disciplines of the accountancy. With the help of these sub disciplines a
business concern unit make able itself to record, measure, process and present
its data in very effective and efficient
result oriented form of information.
Comments
Post a Comment