In the modern era companies, business, not-profit organizations need different kinds of information about their performing activities. accounting provides information for the business and related interested parties or users.
There are many different kinds of accounting that provides different potential information. This types of accounting may be called branches of accounting.
In the practical perspective three types of accounting
1.FINANCIAL ACCOUNTING:
Financial accounting provides information to the external users. External users those are not operate and maintain the business. example of external users: Investors, Shareholders, Creditors, Financial analysts ,Labor union , government authorities and so on. It provides information by statement of financial position. this statement provide information on management performance to judge its effectiveness it utilizing the resources and running enterprise
2.COST ACCOUNTING:
Cost accounting provides information to the internal users.. actually cost accounting is process that the classification, recording, allocation, summarizing and reporting of current and prospective costs. It also determine the cost method and design the cost system.
3.MANAGEMENT ACCOUNTING:
Management accounting is concerned with providing information to managers. Management accounting is the combination of cost accounting and financial accounting.
According to Garrison and Noreen," Management accounting is concerned with providing information to managers that is , people inside an organization who direct and control its operation
