1. There are 7 types ofaccounting which includes government accounting, forensic accounting, costaccounting, auditing, tax accountant, financial accounting and managementaccounting. Governmentaccounting or also known as public sector accounting, refers to the type ofaccounting information system used in the public sector.
Government accountingincludes accounting for legislative bodies and government department. The needto have a separate accounting system for the public sector arises because of thedifferent aims and objectives of the state owned and privately ownedinstitutions. It ensures the financial position and performance of the publicmajor concern of many governments.Forensicaccounting is latest branch of accounting which involves the application ofknowledge and accounting standards in the court of law. This field alsoinvolves the reconstruction of financial information when a complete set offinancial records is not available. This set of skill can be used toreconstruct the records of an unlawful records. Forensic accountant also acts asexpert witnesses in courts of law in civil and criminal disputes that requirean assessment of financial effects of a loss or the detection of a financialfraud.Costaccounting is an accounting method that aims to capture acompany’s costs of production by assessing the input costs of each step ofproduction as well as fixed cost.
Cost accounting is often used within thecompany to aid in decision making. This branch of accounting that observes andcalculate the actual costs of a company’s operations. Internal managers, ratherthan auditors use cost of accounting most the time to identify aspects of theircompany where cost can be cut or lessen.Auditing is anefficient procedure of examining the financial information of an entity withthe aim of giving an opinion on true, honest and fair view. Auditing is acritical, unbiased investigation of each and every aspect of the transactions.Moreover, mistakes and frauds manipulation in accounts or misappropriation can bedetected through thorough inspection. Tax accounting is anaccounting that is tax related.
It deals with business or company’s taxliabilities. Tax accountants are responsible to calculate taxes on behalf ofbusiness or company and individuals. Tax accountants tracks all the amount oftransactions that the company have to pay and the due date of paying the tax.They will calculate to try lessen the amount needed to pay for tax in a legaltax framework.Financial accountingis the process of preparing financial statements such as income statements andbalance sheet for every transactions made. It is to be used by internal usersand external users. External users such as shareholders or potential investor usesit to check on the financial state before making any decisions.
It also allowsfinancial accountants to track the current financial state based on incomings,outgoings, assets, liabilities and transactions made.Management accountingincludes activities to gather and prepare information intended for managementfor the purpose of planning, controlling, decision making, and performanceevaluating and managing the organization as a whole. It is also to track thebusiness’s financial state which is similar to financial accounting. Managementaccountants prepares the financial statements or information that is needed bythe managers to make future decisions and actions to be taken.