what are the three functions of accounting

The third function of accounting is to devise such a system as will meet the legal requirements. (2) Organising (3) Controlling, and (4) Decision-making. The three areas are, cost, finance and management accounting. Functions of accounting include: Accounting ensures the accurate recording and presentation of financial information to help in the decision making process. Management accounting plays a vital role in these managerial functions performed by managers. For the better understanding of the objectives and the functions of accounting, first of all, it is very important to know about the accounting beforehand. The management process implies the four basic functions of: (1) Planning. Those will depend upon the specific nature of your business. Accounting ' The Three Main Functions Of Accounting - Articles Surfing. The first area, financial accounting, is used mainly for ascertaining the results of any such business on a periodic basis, for i.e. Though there are eight branches of accounting in total, there are three main types of accounting, according to McAdam & Co. Financial accounting is only relevant to larger companies. Accounting is a very vital subject in the commerce field. Accounting functions are termed as those set of financial systems that help in the bookkeeping of financial information in the organization, financial analysis, summary creation, reporting of transactions and act as the backbone for almost any business. These are just some of the main roles and functions of the accounting department in businesses, there are many more responsibilities the accounting department is responsible for and a number of subcategories. Accounting ensures accountability and integrity; Through common size statements, a company can compare its financial performance with its … Management accounting is useful to all types of businesses and tax accounting is required by the IRS. Accounting is a base, with the help of which various returns, documents, statements etc., are prepared. The accounting as a system tries to identify, assess and record the transactions of financial nature in a very systematic approach. Hence, its main function is to keep a systematic record of these events. There are three main functional areas of accounting which need to be considered in modern day accountancy for any business. Tax Accounting. (1) Planning: Planning is formulating short term and long-term plans and actions to achieve a particular end. Functions of accounting are also referred to as the purpose of objectives of accounting. The objectives and the function of accounting will be later discussed in depth. Functions of Accounting: The following are the major functions of accounting: (a) Keeping Systematic Records: ADVERTISEMENTS: As a language of business, accounting is to report the results of most business events. Accounting system aims at fulfilling the requirements of law. Under the provision of law, a business man has to file various statements e.g., income tax returns, returns for sales tax purpose etc. These types are tax accounting, financial accounting and management accounting.

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