Question

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Q3: What is an accounting system? List all the six types of operational accounting systems and explain them in your own words.

1. Financial accounting:

2. Public accounting:

3. Governmental accounting:

4. Forensic accounting:

5. Management accounting:

6. Tax accounting:

Answer 1

Accounting system is used to keep track the financial transactions in a summarized manner.

The purpose of accounting is to accumulate and report on financial information about the performance, financial position, and cash flows of a business. This information is then used to reach decisions about how to manage the business, or invest in it, or lend money to it.

1. Financial Accounting: Financial accounting is book keeping of the financial transactions and summarizing the same by following various accounting guidelines, Based on the guidelines needs to be prepare the financial statements from which we can know the actual position of the company and profit we earn. Also we can know the cash outflow in a summarized manner.

2. Public Accounting: Public accounting means accounting service provided by accountants to public. Services are Book Keeping, Audit, Tax works and various analysis of accounting works.

3. Government Accounting: Is the book keeping and maintaining books of accounts of Govt organisation in a systemized manner based on the guidelines by the accounting board.

4. Forensic Accounting: Using the accounting skills need to find out the frauds are made in the accounting. This is a kind of accounting investigation and by which we can control and find out the frauds made in the books of accounts. Based on the investigation need to take the steps to iradicate and control frauds.

5. Management Accounting: Management accounting, also called managerial accounting or cost accounting, is the process of analyzing business costs and operations to prepare internal financial report, records, and account to aid managers' decision making process in achieving business goals. Based on this management will be making various decisions and look for opportunities of investment.

6. Tax Accounting: Tax accounting focused on accounting works of tax. Calculation of tax, payment of tax and ,making various entries accordingly.