The purpose and scope of accounting in complex operating environments

Definition: Accounting is a process that record, analyze and store all of the transactions of a company in a specific period of time.

The purpose is to provide insights and decision-making frameworks related to various internal and external users.

Helping external investors understand a company's performance by comparing its two-year business. Accounting function:

·         Accounting has a very broad reach, which can be explained as follows:

 

-         Financial Accounting: It includes the preparation and interpretation of financial statements, as well as communication with account users. It's historical in nature because it keeps track of previous transactions. The production of the Profit and Loss Account and the Balance Sheet is the final step in financial accounting. It is primarily used to determine the net result for an accounting period as well as the financial situation as of a specific date.

-         Management Accounting: It is focused with internal reporting to a company unit's managers. Management need a range of information to carry out its stewardship, planning, control, and decision-making duties. Cost accounting, which deals with cost estimation and control, is an important part of management accounting.

-         Cost Accounting: The process of cost accounting that begins with the recording of income and expenditure, or the grounds on which they are computed, and culminates with the creation of periodical statements and reports for cost determination and control.

-         Social Responsibility Accounting: The need for social responsibility accounting is growing as people become more conscious of the negative side effects of economic activity. Accounting for the social costs incurred by the business and the social benefits generated is called social responsibility accounting.

-         Human Resource Accounting: Human resource accounting attempts to identify, quantify, and report investments in an organization's human resources that are not already accounted for under traditional accounting practices.