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Types of Accounting Information

Types of Accounting Information
Types of accounting information may be classified into four categories: Operating information Financial accounting information Management accounting information and Cost accounting information 1. Operating Information: This is the kind of  information which is required to conduct the day-to-day activities. Examples of operating information are: Amount of wages paid and payable to employees Information about the stock of finished goods available for sale and Each one’s cost and selling price Information about amounts owed to and owing by the business enterprise Information about stock of raw materials, spare parts and accessories and so on. By far, the largest quantity of accounting information provides the raw data (input) for financial accounting, management accounting and cost accounting.    Spend Wisely   The Ultimate Startup Guide for Entrepreneurs   2. Financial Accounting: Financial accounting information is meant both for owners and managers and also for the use of individuals and agencies external to the business. This accounting is concerned with the recording of transactions for a business enterprise and the periodic preparation of various reports from such records. The records may be for general purpose or for a special purpose.   Focus on the Long Term    3. Management Accounting: Management accounting makes use of  both historical and estimated data in assisting management in daily operations and in planning for future operations. It deals with specific problems that is faced by enterprise managers at various organizational levels. The management accountant is often concerned with finding alternative courses of action and then helping to select the best one. For e.g. The accountant may help the finance manager in preparing plans for future financing or may help the sales manager in deciding the selling price to be fixed on a new product by providing suitable data.     Generally management accounting information is used in three important management functions: Control Co-ordination and Planning 4. Marginal costing is an important technique of management accounting which provides multi dimensional information that helps in  decision making.   Specialised Accounting Fields A number of specialized fields in accounting also have evolved besides financial accounting. Management accounting and cost accounting are the result of rapid technological advances and enhanced economic growth. The most important among them are explained below:   1. Tax Accounting: Tax accounting is all about the filing of tax returns and the consideration of the tax implications of proposed business transactions or alternative courses of action. Accountants specializing in this branch of accounting are familiar with the tax laws affecting their employer or clients and are up to date on administrative regulations and court decisions on tax cases.     2. International Accounting: This accounting is concerned with the special issues associated with the international trade of multinational business organizations or MNC’s. Accountants specializing in this area must be familiar with the influences that custom, law and taxation of various countries bring to bear on international operations and accounting principles.   3.Social Responsibility Accounting: This branch is the newest field of accounting and is the most difficult to describe. Social responsibility accounting is so called because it not only measures the economic effects of business decisions but also their social effects, which have previously been considered to be immeasurable. Social accounting is also known as social accounting and auditing, social and environmental accounting, corporate social reporting, corporate social responsibility reporting, non-financial reporting or accounting.   Benefits of Social Accounting   4. Inflation Accounting: Inflation accounting is a term describing a range of accounting models designed to correct problems arising from historical cost accounting in the presence of highinflation and hyperinflation. Inflation accounting is used in countries experiencing high inflation or hyperinflation.   5. Human Resources Accounting: Human resource accounting is the process...
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