Fundamentals of Accountancy,

Business and Management I

Module 2

Prepared by: Ms. Stephanie Laguitan

Fundamentals of Accountancy, Business and Management 1

Branches of accounting

1. Financial accounting- records, summarizes and reports a company’s business transactions

 through financial statements. These include the income statement, the balance sheet, the

cash flow statement and the statement of retained earnings. These financial reports provide

insight into a company’s performance to its creditors, investors and tax authorities. There

are two types of financial accounting: cash accounting and accrual accounting.

2. Management accounting- management accounting or managerial accounting, managers

use accounting information in decision-making and to assist in the management and

performance of their control functions.

3. Government accounting- refers to the process of recording and the management of all

financial transactions incurred by the government which includes its income and

expenditures. Various governmental accounting systems are used by various public sector

entities.
4. Auditing- is an important term used in accounting that describes the examination and

verification of a company’s financial records. It is to ensure that financial information is

represented fairly and accurately.

5. Tax accounting- Tax accounting is a structure of accounting methods focused on taxes

rather than the appearance of public financial statements.

6. Cost accounting- a process of assigning costs to cost objects that typically include a

company's products, services, and any other activities that involve the company. 7. Accounting

education- a branch of accounting that is responsible for training FUTURE ACCOUNTANTS.

8. Accounting research- part of the process of reviewing and auditing the firm's financial

information to convert the data into insights on complex financial issues that help

companies choose the best course of action.