Accounting is a very old science which aims at keeping records of
various transactions. The accounting is considered to be essential for keeping records of all receipts and payments as well as that of the income and expenditures.
Accounting is the process of identifying, measuring and
communicating economic information to permit informed judgments and decisions by users of the information. (American Accounting Association).
Accounting is the process of collecting, recording, classifying,
summarizing, and interpreting business transactions.
Accounting can defined as the Language of business. (Robert
Anthony).
Accounting is the Practice and body of knowledge concerned
primarily with Methods for recording transactions, Keeping financial records, Performing internal audits Reporting and analyzing financial information to the management, and Advising on taxation matters. (Business Dictionary)
ACCOUNTING CAN BE BROADLY DIVIDED INTO THREE
CATEGORIES.
Financial Accounting, aims at finding out profit or losses of an
accounting year as well as the assets and liabilities position, by recording various transactions in a systematic manner. Financial accounting is mainly concerned with recording , classifying and summarizing financial transactions with a view to prepare financial statements . The main task of financial accounting is to prepare 1. Income statement 2. Balance sheet
Cost Accounting helps the business to ascertain the cost of
production/services offered by the organization and also provides valuable information for taking various decisions and also for cost control and cost reduction.
Management Accounting helps the management to conduct the
business in a more efficient manner. The scope of management accounting is broader than that of cost accounting. In other words, it can be said that the management accounting can be considered as an extension of cost accounting. Management Accounting utilizes the principles and practices of financial accounting and cost accounting in addition to other modern management techniques for efficient operation of a company. The main thrust in management accounting is towards determining policy and formulating plans to achieve desired objectives of management. Management Accounting makes corporate planning and strategies effective and meaningful