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SUB-FIELDS OF ACCOUNTING
1. Financial Accounting: It covers the preparation and interpretation of financial statements and communication to the users of accounts. It is historical in nature as it records transactions which had already been occurred. The final step of financial accounting is the preparation of Profit and Loss Account and the Balance Sheet. It primarily helps in determination of the net result for an accounting period and the financial as on a given date.
2. Management Accounting: It is related to internal reporting to the owner and management of a business unit. To discharge the functions of stewardship, planning, control and decision making, the owner and management needs variety of information. The different ways of grouping information and preparing reports as desired by managers for discharging their functions are referred to as management accounting. A very important component of the management accounting is cost accounting which deals with cost ascertainment and cost control.
3. Cost Accounting: The terminology of cost accounting published by the Institute of Cost and Management Accountants of England defines cost accounting is as follows:
"the process of accounting for cost which begins with the recording of income and expenditure or the bases on which they are calculated and ends with the preparation of periodical statements and reports for ascertaining and controlling costs."
4. Social Responsibility Accounting: The demand for social responsibility accounting stems from increasing social awareness about the undesirable by-products of economic activities. As already discussed earlier, social responsibility accounting for social costs incurred by the enterprise and social benefits created.
5. Human Resource Accounting: Human resource accounting is an attempt to identify quantity and report investments made in human resources of an organization that are not presently accounted for under conventional accounting practice.
Role of Accountant in the Society
There are many types of profession in the world which are held in high esteem in public eyes and there is no denying the fact that the accounting profession in one of them. At the core of all types of learned profession, there is the desire of public good and of finding the best way to serve society. By the help of science of accountancy and the spell of its art, a dynamic pattern which assists business in planning its future is cane by accountants out of the inert mass on non-speaking silent figures. This makes their profession an instrument of socio-economic change and welfare of the society.
An accountant with the help of his education, training, analytical mind and experience i
BOOK KEEPING
Book keeping is an activity concerned with the recording of financial data relating to business operation in a significant and orderly manner. It covers procedural aspects of accounting work and embraces record keeping function. Obviously book keeping procedures are governed by the end product, the financial statements. The term ‘financial statement’ means profit and loss account and balance sheet. Profit and loss account gives result of economic activities for a period and balance sheet states the financial position at the end of the period. Book keeping also requires suitable classification of transactions and events. This is also determined with reference to the requirement of fina
Inventory
Inventory can be defined as tangible property held for sale in the ordinary course of business, or in the process of production for such sale, or for consumption in the production of goods or services for sale, including maintenance supplies and consumables other than machinery spares. Inventories are assets: (a) held for sale in the ordinary course of business; (b) in the process of production for such sale; (c) in the form of materials or supplies to be consumed in the production process or in the rendering of services. Inventories encompass goods purchased and held for resale, for example merchandise purchased by a retailer and held for resale, or land and property held for resa
Accounting Concepts
Accounting concepts define the assumptions on the basis of which financial statements of a business are prepared. Certain concepts are perceived, assumed and accepted in accounting to provide a unifying structure and internal logic to accounting process. The word concept means idea or notion, which has universal application. Financial transactions are interpreted in the light of the concepts, which govern accounting methods. Now we shall study in detail the various concepts:-
1. Entity Concept: Entity concept states that business enterprise is a separate identity apart from its owner. We should treat organization as distinct from its owner. Business transactions are recorded in the
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