Different Fields of Accounting

Different Fields of Accounting:

Accounting includes everything related to the recording, presentation and analysis of the financial information of an entity. Accounting has been a part and parcel of the human civilization since centuries now, the only thing that differs from time to time is the practices used for accounting purposes. Accounting is one of the most important practices or departments in any organization because it helps in financial recording and maintaining those records. Accounting is a genetic term, which actually represents several different activities. There are different fields related to accounting. There are six main fields defined in accounting and hence we would discuss these fields in brief.

Financial accounting is what accounting is considered to be in general terms. Financial accounting includes preparation of the financial statements, such as balance sheet, income statement, cash flow statements etc. The financial accounting field is essential for presenting an overview of the financial position of a firm so that further decisions can be made on the basis of the same.

Another important field of accounting that is gaining importance is management accounting. Management accounting includes financial accounting and other practices to help managers make decisions. It is mainly used for the purpose of p roviding information so that the managers get assistance in strategic, performance as well as risk management practices.
Cost accounting is a very specific field of accounting, which deals with the management of costs incurred by a firm. This includes a study of all the costs that are borne by a company, including its raw materials, labor etc. With the help of different cost accounting methodologies, the managers can then take decisions and decide on the costs they would like to reduce.

Companies include another field of accounting, called the tax accounting. While financial accounting deals with the preparation of financial