What is Accountancy? 10 Branches You Should Know

Government accounting is famous as public accounting, which takes care of disbursements and federal funds allocation. However, welfare funds also come into action when we talk about public accounting and agencies involved in this process. Furthermore, these accountants usually work as consultants and perform ad-hoc duties. Hence, they make utmost efforts to prevent fraudulent activities by keeping a check on the cash accounting system. Legal accounting, also referred to as forensic accounting, deals with cases involving bankruptcy, fraud, or mismanagement.

The measurement and display of the net financial effects of similar type of transactions must be treated in a consistent form. This branch of accounting has grown in response to the difficult tax laws such as relating to income tax, sales tax, excise duties, customs duties, etc. Project accounting tracks the financial progress of specific initiatives (such as construction, research or IT development projects). It involves managing budgets, expenses and profitability at the project level, helping stakeholders stay on schedule and within financial limits. This form of accounting is critical for companies that run multiple, complex projects simultaneously.

What is Branch Accounting? Need, Types

Furthermore by making comparisons it can identify inefficient branches and make informed managerial decisions about their future. In addition managers and staff can be given responsibility and motivated and rewarded on the basis of branch performance. External accounting is related to reviewing the information produced for external use, which mainly includes reviewing the financial statements of a business.

Managers

The management uses cost accounting information to optimise the utilisation of scarce resources and control the expenditure incurred under various heads. The external user groups include creditors, lenders, investors, employees, customers, accounting branches tax authorities, regulatory agencies and so on. Independent branches maintain their own books of accounts in the form of trial balance, trading and profit and loss accounts and balance sheet.

After posting the transactions for the period the branch account appears as follows. Again for clarity the details of each posting are shown in the branch account. During the period goods (95,000) are transferred to the branch from head office. In addition the branch returns goods (1,400) to head office.The following branch journal entries are used to reflect the net movement of 93,600. As can be seen the debit entry to the branch account transfers the beginning net assets of the branch back to the branch account.

Financial Reporting for Branches

Public accounting is closely related to auditing, assurance, governance, and risk compliance of private and public companies. Public accounting refers to the practice of providing accounting and auditing services to other entities. These services may be offered to individuals, businesses, and non-profit entities. Fund accountants examine the amount dedicated to a specific project undertaken by the not-for-profit entity or an NGO. Forensic accounting combines auditing, accounting, and investigative skills for financial and non-financial practices. It is concerned with the detection and prevention of fraud, embezzlement, and malpractices in an organization.

• Tax accountants play a crucial role in preparing and filing accurate tax returns, handling tax audits, and addressing any tax-related inquiries or disputes.
• The goal of the practice is to contribute to the pursuit of justice and financial accountability.
• This process not only maintains the integrity of financial records but also helps in identifying any potential issues that may arise from inter-branch dealings.
• The pace of economic development can be primarily attributed to technological advancements.
• He was convinced that some sort of fraud had taken place within the organization as the business had a very low level of inventory.

Real-Time Data

However, the rules and methods followed by a company for preparing its financial accounting reports may slightly differ from those required by tax laws. Besides that, tax accountants also help companies minimize their tax obligations. Because of these functions, tax accountants need to have up-to-date knowledge about the tax laws and regulations of the state or country where the entity is located or conducts business. Auditing involves the independent examination of financial records to confirm their accuracy and compliance with established accounting standards. Auditors provide an objective opinion on whether financial statements fairly represent an organization’s financial position and results of operations.

He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University. During the period head office pays wages of 28,000, rent of 9,000, insurance of 700 and petty cash expenses of 1,300 in respect of the branch. Consequently the total cash payments amount to 39,000 and this is posted to the branch account as follows. Since the branch account is a temporary nominal ledger account its balances are cleared at the end of each period and returned back to their respective head office accounts.

As can be seen the temporary branch account now has a nil balance ready for the branch accounting process to be repeated in the next accounting period. As can be seen the ending balances representing the branch net assets have now been transferred from the branch account back to the respective head office accounts. To illustrate suppose a business has a retail operation with a number of branches.

It enables organizations to identify areas for cost reduction and assess the performance of cost centers. Managerial accounting, in contrast, provides financial information primarily for internal use by an organization’s management. It is not bound by external reporting standards, allowing for flexible reports tailored to specific decision-making needs.

• It monitors and reports disbursements and receipts from the accounts, ensuring proper fund allocations.
• Non-profit organizations (NPO) and fund accounting collaborate to ensure the accurate and proper allocation of funds.
• Using this standard accounting method helps investors and lenders get an accurate read on a business’s financial health.
• Often times considered as a subset of management accounting, cost accounting refers to the recording, presentation, and analysis of manufacturing costs.
• Interested parties like owners, creditors, management, employees, customers, government, etc. are interested in accounting information.

This method aligns with the accounting principle of revenue recognition, where revenue is recognised when earned and expenses when incurred. Once you have chosen which branch of accounting is right for you, obtaining the necessary education and experience needed to succeed is essential. Depending on the type of accountant you want to become, this could include earning a professional certification or obtaining a degree in accounting.