The main branches of accounting and job skillsets and competencies

 

There are 3 main means of accounting contain financial accounting, management accounting tax accounting.

Financial accounting: Is the process of recording, summarizing, and analyzing all of the historical transactions of a company and report them in the form of financial statement to the public.

-It’s a main factor toward investors, creditors, government to evaluate, analyze the financial status of a company. From that, they can decide about investing, lending,

-Every financial statement must take under the form of financial standards such as GAAP and IFRS and comply with its principles.

 

Management accounting: is the process of identifying, measuring, interpreting the information with a view to assisting managers in internal planning, make decisions and hedging risk.

Unlike financial accounting that predominantly focus on publishing the company’s financial status to outsiders, management accounting destines to internal reporting in decision-making.

Management accountants need to analyze a series of event and operating process such as line of products, operating activities to turn them into useful takeaways that can be tapped into by managers to make decisions and to achieve the goals.

Tax accounting: is the method of accounting that focus on tax obligation and used for everyone such as individuals, corporations, and other entities or even a tax-free organization. The purpose of this is track the funds along with individuals or corporations.

 Types of tax accounting:

-For individual: focus diligently on income, investments and other transactions which related to tax burden and track all money in and out of person.

- For business: Company’s profit, incoming cash flows and other investment must be tracked.

This can contain business expenses and funds toward shareholders.

- For Tax-free organization: The reason why tax accounting necessary for this organization because they must report the annual returns such as grants, donations and how they used. This process makes sure that this organization honor all laws.