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    Posted April 14, 2014 by
    icamarketing
    Assignment
    Assignment
    This iReport is part of an assignment:
    Introduce CNN Student News

    Branches of Accounting, Its Uses and Limitations

     
    Organizations and establishments need accounting for satisfied and correct operation. Recording business transactions is vital. The right methods must be used, and the transactions must be analyzed well.

    If you are interested in the accounting profession, you will need all the accounting careers information you can find. You should not only be familiar with the accounting careers and salaries, but also about the different branches.

    Below are the branches of accounting:

    1. Financial Accounting – this refers to the company’s periodic reporting on its financial position and the result of operations with regards to other parties
    2. Management Accounting – this branch is more focused on the internal preparation of accounting information and its analysis
    3. Auditing – this branch focuses more on the examination of the accounts and internal control system of a firm/company, and its verification
    4. Tax Accounting – this branch is governed by the rules of a country or state; this is dependent highly on legislative process
    5. Fund Accounting – this is usually used in nonprofit entities
    6. Forensic Accounting – this is used in legal matters such as dispute resolution, investigation, and litigation support

    As you decide to be part of accounting careers awareness program, you should also know the uses of your profession. The human memory has limitations, and since businesses deal with a lot of transactions, accounting is very useful because it records everything. It is compulsory to record all transactions in compliance to the statutory provisions.

    Through the financial statements, a company can instantly determine its position. Another important matter is that paying taxes is a must. As business needs to pay property tax, sales tax, income tax, import duty, excise duty, custom duty, and many others.

    Here are other uses of accounting – knowledge of debtors, creditors, and collectibles; determination of business sale price; evidence in court; assist in making top management decisions; and more importantly – help in the development of a nation.

    Though accounting has many uses, it also has limitations. Even if you get the best accounting careers education, you need to realize the limitations of the profession:

    Accounting estimates
    Verifiability
    Measurability
    Fraud or error
    Professional judgment
    Predictive value is limited

    Learning the different accounting careers information will help you decide if this is the right path for you. Anyone can be an accounting professional, but it takes dedication, effort, money, and time. Now that you know the different branches, uses, and limitations, you can make an informed career decision.
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