What Does Accounting Consist Of.
ï»¿What Does Accounting Consist Of Business Records
What Does Accounting Consist Of?
Any form of accounting consists of bookkeeping. It covers the practice of maintaining the business records of an organization or even a private individual; it can also cover the preparation of all of the relevant forms and documents relating to tax return s and other financial statements.
In any company a fully trained and qualified accounting officer (the accountant) will be responsible for ensuring the highest levels of accuracy and bookkeeping to be able to make sure that all financial data is readily available for scrutiny by other company officials, managers, and perhaps financial auditors.
The very nature of the accounting task demands that it be split into two discreet categories, Financial Accounting and Management Accounting. Letâs take a brief look at both of these aspects of the accounting function.
* Financial Accounting. This form of accounting is dedicated to external financial reporting where reports are made available to outside parties who have had no hand in the preparation of the companyâs financial statements and documents. Such accounting may be used in situations where the company is to be sold or perhaps involved in a merger, obviously such information would need to be available if the company was contemplating âgoing publicâ. Of necessity this kind of accounting has to be in standard format and in the USA, certainly in the private sector, should conform to the requirements of the Financial Accounting Standards Board. (FASB).
* Management Accounting. Management accounting is for internal consumption within the company, where individual business managers and departmental heads need information relating to the overall financial status of the company in order to be able to formulate business plans, usually carried out on an annual basis, or perhaps more frequently as changes in the market take place. Internal management accounting due to its very nature does not need to follow any standard procedure or have any mandatory guidelines.