Accounting is divided into eight types. You can get through this post below to learn all of them. Many students right here may not have a clear understanding of accounting so we came up with this post. Make sure to get through it entirely and know every type of accounting.
Well, accountants not only create taxes as per the conventional duty but do as many tasks as possible. They take care of all the accounting stuff that many entrepreneurs would find hard, that’s the reason they fill the gap between them. Not only do they audit businesses but also investigate white-collar crimes. Every business can prepare the accounting cycle and get through the profit and loss with the services of accountants.
Types of Accounting
– Management Accounting
Management accounting is used across the world that helps you to make the right decisions for your enterprises. There are several other procedures and policies with the first kind of accounting. It is again classified into different other types such as Risk management, Strategic management, and Performance management.
Getting into this field of accounting can lead you towards so many desirable positions such as billing clerk, payroll check, controller, cost accountant, and payables clerk. Cost accounting and target costing are vast areas covered in this field of accounting.
– Internal Auditing
This accounting type works and takes care of business transactions. This way, it determines fraud, weaknesses, mismanagement, and waste. You can start internal auditing by becoming an internal auditor. With your progress, the post can be changed and promoted to manager of internal audit.
Internal auditing also has some specialized areas like information systems auditing and environmental auditing. If you want to keep your eyes on the mismanagement of the company then this post is good for you. There are some of the best accounting firms in NYC where you can apply for this post.
– Public Accounting
You can provide the services to lots of your clients like manufacturers, nonprofit organizations, individuals, service businesses, retailers, governmental organizations.
Moreover, this field involves tasks such as consulting activity, tax advisory, and tax preparation.
Moreover, public accountants provide their strategies on business and internal accounting. The starting position here is audit staff which will, later on, be promoted to audit partner.
– Forensic Accounting
In this field, accountants have to reconstruct the financial information when other financial records are not there. As only some of the companies demand forensic accountants, it behaves more like a consulting position. The accountants here are involved in legal cases, fraud, claims, and legal cases.
Due to its concerning areas, it is gaining popularity among different enterprises. They work and transform the fraudulent data into accrual accounting.
– Tax Accounting
Tax accounting is well known as compared to others. The accountants here help and figure out different taxes. They work smartly on legally diminishing the amount of owing tax. Any other problems and issues related to tax can also be resolved in this field of accounting.
Moreover, accountants get a clear picture whenever involved in the calculation and reporting of tax liabilities. Tax accounting works for every business, non-profit, individuals, and government organization by providing a calculator on lower tax liability, tax returns, tax due, and file tax forms. It also helps to build a strong tax strategy so that every other small business can benefit from it.
– Cost Accounting
This field of accounting helps in figuring out the real costs incurred in a business. Well, traditionally cost accounting is used in a manufacturing business but it has evolved and conquered the service businesses also. Not only the fixed costs, but accountants need to go through the variable costs as well like maintenance, overhead, materials, production, management, and labor costs.
Many expert accountants consider cost accounting as one of the forms of management accounting that ensures the right decision for the company. If you have some interest in CPA and want to settle in New York, check out CPA salary NYC.
– Governmental Accounting
Governmental Accounting Standards Board (GASB) governs governmental accounting. It helps in reporting and tracking government works. In this particular field, the government uses other funds to record income and expenditure.
This way the government gets to know which funds are spent on which project and what is the remaining amount. Well, the government classifies the fund into five types known as:
- Special revenue fund
- Permanent fund
- Debt services fund
- Capital projects fund
- General fund
– Financial Accounting
Well, this is the most basic part of accounting that focuses on tracking, recording, and reporting the transactions. Financial accounting is different from all discussed above as it only speaks about past performance rather than future outcomes.
It monitors the financial statement of a period and provides a clear picture of assets and liabilities. This result later on transformed into other stakeholders like financial institutions and investors.
So, these are the eight types of accounting. We hope that you are left with no unanswered queries. However, if you have some other doubts, drop your concern in the comment below.