Branches of Accounting Overview

Study Notes

Branches of Accounting

Financial Accounting tracks a business's financial performance by recording transactions and creating financial statements.
Managerial Accounting helps company management make sound decisions and improve profits by focusing on the use of money.
Cost Accounting, a subset of management accounting, analyzes project or product costs to determine their true value.
Auditing checks a business's financial performance, either externally by an independent auditor or internally by a person within the company.
Tax Accounting helps businesses understand tax implications, provides tax reduction advice, and calculates taxes based on business type.
Fiduciary Accounting tracks money inflows and outflows to ensure proper fund utilization and is frequently used by guardians or custodians.
Project Accounting monitors project costs and provides regular performance reports to aid in future decisions.
Forensic Accounting, also known as legal accounting, addresses legal issues like bankruptcy, fraud, and mismanagement.
Fund Accounting ensures proper allocation of funds in non-profit organizations (NPOs).
Government Accounting tracks government agency funding to ensure budget adherence across various sectors like healthcare, housing, and education.
Political Campaign Accounting monitors donations and transactions in campaigns to comply with federal and state laws for local, state, and national elections.
International Accounting assists businesses in understanding the laws and regulations of other countries for global expansion.

Types of Business

Service businesses provide skills and expertise in exchange for fees. Examples include accounting, legal services, personal services, automotive repairs, fitness facilities, hospitals, schools, hotels, and more.
Merchandising businesses buy products wholesale and sell them at retail prices, generating profit by marking up the cost.
Manufacturing businesses transform raw materials into new products by combining materials, labor, and overhead costs, selling the finished goods to customers.

Business Organizations

Partnership businesses involve two or more people working together, with responsibilities shared equally in a general partnership or with limited roles in a limited partnership.
Corporations are separate legal entities from their owners, called shareholders. They pay their own taxes before sharing profits with the owners.
Sole proprietorships are simple to establish with one person owning and operating the business, with no distinction between the business and the owner.
Cooperative businesses are owned and operated by a group of people working towards a shared goal, with profits and benefits shared among them.
Limited Liability Companies (LLCs) are popular for small businesses, offering flexibility in management and acting as separate legal entities.

Description

Explore the different branches of accounting with this quiz. From financial and managerial accounting to auditing and tax accounting, learn how each branch plays a distinct role in business management and financial understanding. Test your knowledge on the various functions and implications of accounting practices.