Accounting as a subject is a vast field. The various subfields of accounting are as given below:
Sub Fields of Accounting
Scope of financial accounting covers the preparation and interpretation of financial statements and communication to the users of the accounts. Financial Accounting is historical in nature because it records transactions which have already occurred in the past. The last step of financial accounting is the preparation and presentation of Profit and Loss A/c and Balance Sheet. It primarily helps in the determination of the net result of an accounting period and the financial position as on a given date.
Management Accounting is concerned with internal reporting to the managers of a business enterprise. To discharge the functions of stewardship, planning, control and decision-making, the management needs a variety of information. The different methods of grouping information are preparing reports as desired by the managers for discharging their attest functions are referred to as management accounting. A very important component of the management accounting is cost accounting which deals with the ascertainment of cost and their control.
According to the terminology of cost accounting published by the Institute of Cost and Management Accountants of England and Wales defines cost accounting as:
“the process of accounting for cost which begins with the recording of income and expenditure or the base on which they are calculated and ends with the preparation of periodical statements and reports for ascertaining and controlling costs.”
Human Resource Accounting
HR accounting is an attempt to identify, quantify and report the investments made in the human resources of a business organization. As modern accounting is based on the Money Measurement Concept, the human resource is not presently accounted for. Hence HR accounting is important to quantify the contribution of human resources.
Social Responsibility Accounting
The demand for social responsibility accounting stems from increasing social awareness about the undesirable by-products of economic activities. As discussed earlier, social responsibility accounting is concerned with accounting for social costs incurred by the enterprise and social benefit created.