Question

Describe the 3 types of accounting with special emphaisis on the role performed in each

Answer 1

The three types of accounting are:

1. Financial accounting: It is done to record monetary transactions of the business i.e. incomes ,expenses , assets and liabilities in order to record the transactions and ascertain the financial position. Financial accounting is primarily designed to provide users with information.

2. Cost accounting: It is primarily deals with costing and pricing of products used in manufacturing industries majorly. The emphasis on this accounting is to identify the costs related to production, the overhead costs and determine the cost of goods sold. It deals only with product specific costs.

3. Managerial accounting: Managerial accounting is done for the management purpose i.e. it involves analyzing, interpreting and communicating the information provided by financial accounting for decision making purpose. This accounting is used by managers to take strategic business decisions.