IN ACCOUNTING THERE ARE MANY TYPES OF ACCOUTING.THOSE TYPES ARE DETERMINE BASED ON THE NATURE OF INFORMATION ANALYZED, SUMMARIZED, REPORTED AND ON THE FUNCTIONS PERFORMED.

Financial accounting.

Management accounting.

Cost accounting.

Tax accounting.

Project accounting.

Not-for-profit accounting.

International accounting.

Government accounting.

Social accounting.

Forensic accounting.

WHAT IS THE DIFFERENT BETWEEN FINANCIAL ACCOUNTS, MANAGEMENT & COST ACCOUNTS?

BASIS	FINANCIAL ACCOUNTING	COST ACCOUNTING	MANAGEMENT ACCOUNTING
Object	Record transactions & determine financial position & profit or loss.	Ascertainment, allocation, Accumulation and accounting for cost	To assist the management in decision making & policy formulation
Nature	concerned with historical data.	Concerned with post past and present with recorded (historical in nature)	Deal with projection of data for future (futuristic in nature)
Principle Followed	Governed by GAAP	Certain principles followed for recording costs.	No set principles are followed in it
Data Used	Qualitative aspect is not recorded	Only quantitative aspect is recorded	Uses both quantitative and qualitative concepts.

TYPES OF ACCOUNT

What is the difference between accounting and bookkeeping?

Accounting is the process by where a company’s financials are recorded, summarized, analysed, consulted and reported on. Bookkeeping is the recording part of this process, in which all of the financial transactions of the business (consisting of income and expenses) are entered into a database.

In bookkeeping component: –

DAY BOOK

CASHBOOK

LEDGER

CASH VS ACCRUAL METHOD

CHART OF ACCOUNT

JOURNALS

FINANCIAL STATEMENTS

In Accounting: –

Focus is on the analysis of financial data

Provided overview/suggestion bookkeeping process.

Assist with financial planning decision (related to finance)

Adjust data for reporting & tax purpose

Total financial solution = accountant+ bookkeeper

What are the 5 types of accounts? Or Terms of account also.

 Assets= Assets play a very important role in running a business. You can’t run a business without assets. Assets mean any business key that we can convert into a term of money that gives long term benefits. it will provide a future benefit. Assets are reported on a company’s balance sheet and are bought or created to increase a firm’s value or benefit the firm’s operations.

There are two types of assets.

1.Tengible assets= we can touch and see also like: -machinery, land, equipment, office furniture, plant, stock, cash etc.

2.Intengible assets= can’t touch and see like: – copyright, brand, patents, license, trademark, franchises etc

Liabilities=Any amount which is payable by the business to the outsider or supplier. Any type of loan or borrowing either from an individual or bank that needs to be paid back in a given point in time. For example: – salary payable, loan payable, int payable etc.

There are two types of liabilities

1.short term liability: – Short term liabilities are the one that needs to be settled within 12 months’ period. Short term liabilities are called current liabilities. (o/s salary, o/s rent etc)

2. long terms liability: – Long term liabilities are the one that are due after and above 12 months. (bank home loan, personal loan (more than one year)

 3.Equity: – we understand equity in simple word, equity is ownership. In the business world, equity refers to stocks.

In the accounting and corporate lending world, equity (shareholders’ equity) refers to the amount of the owners or the difference between the company’s total assets (weather it is tangible assets or intangible assets )and its total liabilities..(short term or long term)

 हम साधारण शब्द में इक्विटी को समझते हैं, इक्विटी स्वामित्व है। व्यापार की दुनिया में, इक्विटी शेयरों को संदर्भित करता है।

लेखांकन और कॉर्पोरेट ऋण देने वाली दुनिया में, इक्विटी (शेयरधारकों की इक्विटी) से तात्पर्य मालिकों की राशि या कंपनी की कुल संपत्तियों के बीच अंतर (यह भ्रामक संपत्ति या अमूर्त संपत्ति है) और इसकी कुल देनदारियों (छोटी अवधि या लंबे समय) से है।

4. Revenue: – Income means business income. It also means regular income or recurring nature of income. The proceeds add to the capital.

Example of proceeds

Receipts from the sale of goods, interest earned, commissions earned, rent earned, dividends earned, rebates earned, etc.

 5.Expenses: – Expenses are the costs incurred for the purpose of earning the Revenues in future. In expenses, at first, the business gets the benefit and then later on, the business makes the payment for that particular expense. Examples are Salaries, Telephone Bills, Electricity Bills etc

How many types of expenses?

There are mainly two types of expenses.

Direct expenses: – Direct access means that relation directly affects the cost of the product. In another word expenses which are specifically incurred and be directly and wholly allocated to a particular product, job or service are termed as “direct expenses”.

Indirect expenses: –  Indirect Expenses are those expenses that are not related to manufacturing or factory overhead.

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