Accounting is how you record business details and understand organized business transactions. You can think accounting as big machine where you put all your raw financial information about taxes, projections and it will turn into easy-to-understand business statements. There are different types of accounting. Some of them are:
The main purpose of financial accounting is to maintain record, classify business transaction and prepare and present financial statements for internal and external users. This must be done along with the standard guideline accounting principles GAAP rules. The rules are made by the financial accounting standard board (FASB) to promote consistency in the reporting process. Financial accounting gives quantitative details about business performance. The complete statements are provided to outside stakeholder such as investor and financial institutions. There are two types of financial accounting, cash and accrual accounting both methods are used in double entry accounting to record information about finances.
Management accounting is used around the world for business purposes. It provides necessary information to make the high-level decisions in the businesses. The information is shared with others in an organization to compare with managerial and financial statement. The letter is designed to inform stakeholder, investor and financial institutions to give information about the performance of a business in a specific period of time to prepare the report on the basis of management accounting.
Three common types of management accounting
- Strategic Management
- Risk Management
- Performance Management
Public accounting focus on auditing, tax preparations, tax advisory, consulting activity. It includes financial statements and analysis.
There are public accounting companies in Dubai that offers many other services to their client like bookkeeping, accounting managements, payroll services, financial consulting. Sometimes they suggest accounting software according the demand of businesses of the client and customer.
Cost accounting focuses on the actual cost of businesses. The discipline looks at both fixed and variable cost that business has made such as material, labor, overhead, maintenance, production cost. Cost accounting provides essential information about the breakeven points.
Forensic accounting is used to investigate the financial activity of both individuals and businesses. It is frequently used in banks, police departments, attorney, businesses examine financial transaction to provide complete reports. Forensic accounting is used in fraud case and embezzlement cases mostly. The accountants use the skills of data collection, data analysis and reporting methods to take out information as VAT consultants in Dubai.