Branches of Accounting and Its Various Uses

Most of us get completely confused when it comes to differentiating between bookkeeping and accounting. Bookkeeping records transactions resulting in transfer of money or something that is equivalent to worth of money. Accounting is quite comprehensive in nature and extends to classification, summarisation, presentation and analysis of accounting information.

The body of knowledge that consists of postulates, principles, conventions, assumptions, rules and concepts and governs science of recording, classification and analysis of financial transactions is described as accounting. Practice and the art of accounting are referred to as accountancy. In order to meet with the ever increasing demand of accountancy, the accountants in London have come into being. Various branches like management, owners, taxation authorities and creditors have also come into being. In order to aid these branches, an accountant in London has proved its immense relevance. The objective of financial accounting lies in ascertaining the result of business operations in the course of a given period and to state financial position on a given date.

The object of cost accounting is finding out cost of goods that have been produced or services that are rendered by a given business. Acost accountant in London helps to find out cost of goods produced or services rendered by a given business. They also help business to control the cost by indicating avoidable losses as well as wastes. The objective of management accountants in London is supply of relevant information on time to the management helping it to take decisions or exercise control. The objectives of financial accounting are possible to complete only by recording financial transactions in a systematic way going by a set of principles. This recorded information must be classified, analysed and presented in a way so that it becomes possible to ascertain financial position and business results.

Accounting plays a very significant role in developing information to provide an answer to multiple questions that are faced by users of accounting information. -Analyses how good or bad is the financial condition of business -Finds out if business activities resulted in profit or loss -Checks out on the performance of different departments -Finds the products or activities that have proved profitable. -Finds out the products that should be discontinued and production of commodities that are to be increased. -Find out whether it is better to buy a component from the market or manufacture it -Impact of existing business on profitability. -Ways to plan for future in order to ensure desired results.

The answer to these questions can be provided by an accountant in London.

Accounting also proves quite useful in the given below respects: -Increased volume of business resulting in larger number of transactions. With accounting records, there is little need to remember about different transactions. -Accounting record that is prepared on the basis of uniform practice allows business to compare results from one period with that of another. -Taxation authorities consisting of both income as well as sales tax are more likely to believe in the facts and figures that are contained in accounting books.

Thus, it is clear that though there are multiple branches of accounting with each helping in a different manner, there is no denying the fact that accountants in London occupy one of the most significant positions for business.

Jayson Fox is presently working as an accountant in London . He is also the owner of an accounting firm and deft at providing guidance in different fields of accounting.