Accounting class

1. Financial accounting

It is the most primary and basic level of financial management feature of the accounting system. Financial accounting is a particular type of accounting that includes a method of documenting, summarising, and reporting the transactions arising from business operations for a period of time. Such transactions are outlined in the preparation of accounts, including the balance sheet, income statement, and cash flow statement, which document the financial results of the company over a particular period of time. In India, companies must report the transactions that occur during the fiscal period or a financial year between 1 April to 31 March. Financial accounting reflects the accounting on "accrual basis" over the accounting on "cash basis". Non-profit firms, companies, and small businesses use accountants in financial matters. The main role of financial accounting is to summarize, analyze interpret, and transfer the information about finances and capital of the company to the owners and managers of the organization. It has proved to be very useful for businesses. In a country like Saudi Arabia, the installation of financial accounting is necessary because being a rich place it has to account for its expenses. So, it is important as a feature for the nation. The method of it's working is so efficient that it ensures an error free work. It's performance is likely to be appreciated by the financial department because it makes their work easy. It is mainly divides into three parts for smooth functioning, they are cash accounting, accrual accounting and companies financial statements. These help in its effective performance.

2. Managerial accounting

Every type of system needs a manager to manage and carry out the daily operations efficiently. In the accounting world, a lot of activities are involved so it needs a lot of management. This feature of accounting is the one that manages all the functions and helps the company to give its best. It is a fact that the growth of efficiency of a company depends on the way it is managed. This is the reason every accounting system has the feature of managerial accounting. For better results of the services of a company, transparency is very important. With the help of managerial accounting, the transparency of the sevices among its employees increases. Managerial accounting is the practice of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for the pursuit of an organization's goals. It varies from financial accounting because the intended purpose of managerial accounting is to assist users internal to the company in making well-informed business decisions. Managerial accounting encompasses many facets of accounting aimed at improving the quality of information delivered to management about business operation metrics. Managerial accountants use information relating to the cost and sales revenue of goods and services generated by the company. This proves to be very advantageous to the company or the organization. When the information of sales and marketing are clear, it becomes easier for the company to function better. It provides error free service and also has a big role in the process of decision making about the company's system.

3. Cost accounting

This feature is accounting manages the net cost of the product and inventory. It makes a data which is filled with the accounts of all the cost. The amount of money spent behind each and every product is recorded separately. This segregation helps the managers to understand the finances of the company in a better manner. Cost accounting is a way by which the planning of the funds and investments is done very strategically. Not only that it is also quite helpful in calculating the future cost so that the organization is ready to set their budget accordingly. In this the chances of the upliftment of finances and stocks also increases. The managers get a lot of help in understanding the variable and the fixed cost depending on the manufacturing rate. It mainly works and is useful for the internal management of the system. This boosts the financial status of a business. For the smooth functioning of the whole process, there are some types. These types are :-

● Standard costing

There is a need of certain tools and components for the manufacturing goods. All these components like labor, raw materials etc come under standard costing.

● Activity based costing

This is a type of accounting that eliminates the use of those services that brings loss to the company. It divides the cost according to different products and then calculates it separately.

● Lean accounting

Lean accounting observes the performance of the company and suggests changes accordingly to better it's performance. It has the potential of discovering the shortest cycle possible of production to eliminate waste.

4. Audit

Accounting has many sections, it also needs a legal system to ensure the security of the legal services and guidelines. Accounting and audit have a pivotal role to play in the financial record keeping process of any business though their roles are different in their focus. While accounting translates to a much wider field, encompassing everything from the organization to the management of the flow of money through the company, auditing is more of a specialized service. Auditing is a part of the accounting world. It is an examination of accounting and financial records that is undertaken independently. This is done to determine if the company or the business undertaking has conformed its operations to the laws and the generally accepted accounting principles. Whether you are a small business or a complex organization, keeping track of all your financial activities can be a daunting task. And accounting does just that for you by keeping track of your business. It reliably records every aspect of financial activities taking place, which is a crucial piece of information for the management of your company. One key function of accounting is keeping you updated about the company’s performance.This helps in identifying the areas of underperformance and those that require corrective measures. The information derived from accounting assist in the long term project planning of the business as well. It focuses on the economic grounds of the company also. Audit accountants are also present to maintain surveillance inside out of the organization.

5. Taxation accounting

When we talk about the legitimacy of a company, paying taxes is a must. Every type of organization needs to pay a certain amount of tax to the government. It is very necessary. Tax accounting is the means of accounting for tax purposes. It applies to everyone—individuals, businesses, corporations, and other entities. Even those who are exempt from paying taxes must participate in tax accounting. The purpose of tax accounting is to be able to track funds (funds coming in as well as funds going out) associated with individuals and entities. Under GAAP, companies must follow a common set of accounting principles, standards, and procedures when they compile their financial statements by accounting for any and all financial transactions. Balance sheet items can be accounted for differently when preparing financial statements and tax payables. For example, companies can prepare their financial statements implementing the first-in-first-out (FIFO) method to record their inventory for financial purposes, yet they can implement the last-in-first-out (LIFO) approach for tax purposes. The latter procedure reduces the current year's taxes payable. In Saudi Arabia, paying tax has been made very unavoidable by the government. So it is quite necessary for this feature to be operated. Actually it depends on the individual and company whether they are able to account their taxes and finances on their own. If not then this feature proves to be very helpful. It is important to keep the tax department of a company ready and checked to ensure efficiency. This is a very useful feature.