Learn what accounting is and its different branches

The science of accounting is concerned with recording and classifying economic events in preparation for drawing conclusions that benefit decision makers and are required from the internal and external parties of the institution. Accounting has many different branches and functions.

Accounting:

It is a tool for measuring and explaining the results of accounting activities, and communicating related financial information to the users of that information

or:

Recording, classifying and summarizing financial operations, and presenting and disclosing financial information through financial statements prepared for a specific period of time

As defined by the American Accounting Association as: “The process by which economic information is identified, measured, and communicated that helps users of this information make sound economic decisions.

Accounting branches

1 - Financial Accounting

It is the recording and classification of the financial transactions of the economic units and the preparation of accounts and the final financial statements (the statement of financial position) at the end of each accounting period.

2- Managerial Accounting

It is the branch that provides accounting information to the management in the facility to help it perform its function. It provides the management with the necessary accounting information that helps it to formulate policies and develop plans to exploit the available resources and take the right decisions. It also contributes to enabling the management to follow up and implement plans and monitor the efficiency of performance.

3- Cost Accounting

Determining the cost of production and assisting the administration in planning the various production activities and achieving control over them in order to achieve productive efficiency and ensure the best use of the various production elements

4- Governmental Accounting

It is one of the branches of accounting and is concerned with studying the principles that govern the processes of assessment, registration and accounting report on the activities carried out by the government.

5- Tax and Zakah Accounting

It is concerned with calculating the income for tax (tax base) in light of the regulations and instructions issued in this regard, and determining the zakat base subject to zakat under Sharia rules.

6- Auditing

Auditing is one of the functions closely related to the accounting functions and independent of them at the same time. It aims to verify the accuracy of information or data, especially the data resulting from the financial or external accounting department, for the purpose of expressing a neutral technical opinion on the fairness of the financial statements of a particular facility in showing the financial position and the result of the work of that facility. .

7- Accounting Systems

The Accounting Systems Department is one of the fields of accounting that specializes in designing accounting systems for enterprises, supervising their implementation and then evaluating them. There is no doubt that the use of computers in accounting and electronic data operation has led to the improvement of accounting work and increase its efficiency and speed.

8- International Accounting

It is concerned with recording operations in different currencies and preparing consolidated financial statements in light of different laws and currencies in circulation, different economic conditions and export and import systems in different countries.

9- Social Accounting

It is considered one of the modern branches of accounting, as it is concerned with measuring costs and social benefits, which were difficult to measure before, and its impact on the economic unit and society.