The important branches of accounting are Financial Accounting, Cost Accounting and Management Accounting.
1. Financial Accounting: The purpose of financial accounting is to ascertain the financial results of a firm i.e. the profit made or loss incurred in the operations during a specific period. It is also aimed to know the financial position i.e. the assets and liabilities position as on a particular date. It also provides relevant information to the management for decision making purposes. It is helpful for planning and controlling the operations of the business.
2. Cost Accounting: The purpose of cost accounting is to analyze the expenditure so as to ascertain the cost of various products manufactured by the firm and fix the prices. It also helps in controlling the costs by providing the necessary cost information to the management for decision making purpose.
3. Management Accounting: The purpose of management accounting is to assist the management in taking rational decisions. For example, pricing decisions make or buy decisions, capital expenditure decisions etc. This branch of accounting is primarily concerned with providing necessary accounting information about funds, costs, profits etc., to the management.
