The two main fields of accounting are Financial Accounting and Managerial Accounting. Financial accounting focuses on reporting historical financial data to external stakeholders (investors, creditors) using GAAP, while managerial accounting provides detailed, forward-looking reports for internal decision-making by management.
There are several different types of accounting–from cost auditing to public accounting–but two of the most common are managerial (sometimes referred to as management) accounting and financial accounting.
The different branches of accounting
Both are about tracking the company's financial position and making reports. However, while financial accountants provide reports to be used externally, management accountants create reports to be used internally.
Financial Accounting is concerned with keeping a record of all the financial transactions of the business and finding out the profit earned and loss incurred, during an accounting year. Cost Accounting aims to analyse the expenditure/cost incurred in every activity and therefore makes efforts to control the costs.
The two primary bases for accounting are cash basis and accrual basis. Cash basis documents financial transactions as they occur, whereas accrual basis records transactions as they take place, whether any cash has been received or paid.
The main difference between bookkeeping and accounting is each role's focus. Bookkeepers handle the day-to-day recording and organization of financial transactions. Accountants take a more holistic approach, analyzing, interpreting, and reporting on financial data—often in the name of providing strategic advice.
There are many types of accountants, including:
Managerial accounting is generally considered to be easier than financial accounting. The main reason for that is that managerial accounting mainly involves budgeting and forecasting, and it's meant for internal use.
The three major elements of accounting are: Assets, Liabilities, and Capital. These terms are used widely in accounting so we'll take a close look at each element. But before we go into them, we need to understand what an "account" is first.
Accountants also create reports that summarize and analyze the data to help assess the financial health of the business and to look for any errors or discrepancies in the financial records. There are twelve different areas of accounting, depending on type, focus, and purpose.
ACCA is the most globally recognized, accepted in more than 180 countries. CPA is well-recognized in the U.S. and its subsidiaries, while CA holds recognition predominantly within India.
Types of Accounting
The easiest accounting field often depends on an individual's aptitude and interests, but many find that basic bookkeeping and accounts payable/receivable roles tend to be relatively straightforward entry points into the accounting profession.
Unlike BSA students, who need to pass the Lecpa to practice public accounting or become a firm partner, BSMA graduates can step right into corporate roles or pursue global certifications like the CMA, which is a highly respected credential that opens doors to international career opportunities and competitive salaries.
Following GAAP ensures financial information is consistently and accurately reported. It is an accounting practice required by for profits, not-for- profits, and government entities.
Some of the most famous certifications include the Certified Public Accountant (CPA), Certified Management Accountant (CMA), Certified Internal Auditor (CIA), Certified Financial Planner (CFP), and Certified Information Systems Auditor (CISA). Branches of accounting: Financial accounting. Management accounting.
PwC, Deloitte, EY and KPMG are the leading players in the accountancy industry, with their services spanning advisory, audit and assurance, tax, risk consulting and management consulting, and capital and transaction management.
This foundation course is an entry-level accounting qualification, ideal for anyone who is seeking an introduction to basic accounting principles and skills.
With hands-on experience in bookkeeping, calculating taxes, data entry, and paperwork, the Financial Assistant also helps the organization make a better financial plan. Other words for bookkeeper include treasurer, bursar, cash-keeper, purser, financier, financial officer, etc.
After gaining experience as a bookkeeper, the next logical step is often to become an Accountant. Accountants analyze, interpret, and report financial data. They play a crucial role in tax planning, auditing, and financial forecasting.
Bookkeeping often requires less formal education than accounting, making it faster to enter but with fewer advancement options. Accounting involves more complex responsibilities and tools, while bookkeeping focuses on daily records and is easier to manage early in your career.