Accounting is the process of:recording,classifying,summarising,analysing and communicating the financial information to the users of accounting service to make decisions.
BY PARUL PANDYA
What kind of transaction should I take into accounting???
Only those transactions which are financial in nature and that can be recorded in terms of money.
BY PARUL PANDYA
So it is a service activity as it generates accounting information..right??
Right..You must also know that accounting is both science, as it has principles, as well as art as we need to practice it to gain perfection.
BY PARUL PANDYA
Branches of accounting:1. financial accounting2. cost accounting3. management accounting4. tax accounting5. social responsibility accounting
I have very well understood the characteristics of accounting. Can you tell me types of accounting now??
Sure, what we just discussed was Financial accounting. 2nd is Cost accounting that helps in ascertaining cost of product or service.
BY PARUL PANDYA
OK..Social Responsibility accounting must be responsibility towards employees, customers, HR and society..Right??
Yes..Management accounting helps management to take managerial decisions. And accounts prepared to calculate Income Tax, GST etc is Tax accounting.
BY PARUL PANDYA
Ok..now I understand how important accounting is for a business. Thank you very much for explaining.