BRANCHES OF ACCOUNTING

1. Financial Accounting 2. Management Accounting 3. Government Accounting 4. Auditing

5. Tax Accounting 6. Cost Accounting 7. Accounting education 8. Accounting research

Financial Management Government Auditing Tax Cost Accounting Accounting

Accounting Accounting Accounting Accounting Accounting Education Research

Definition Deals with the Focuses on Accounting Examines and Lays down Finds out the Deals with the Continuous
financial the for the receipt evaluates the different cost of promulgation improvement
transactions preparation of and financial treatments of specific cost of accounting of the
of a business reports for use disposition of statements of the taxing objects to knowledge to accountancy
of managers government a company authorities help in the various field through
in their funds independently regarding functions of interested researches
decision financial both financial parties that and studies
making transactions and will aid them
management in achieving
accounting their
individual
goals

Type of Financial Management Periodic Auditor’s Tax returns to Cost of N/A Research
report statements reports financial report which be used by production results
generated reports; contains the taxing report; other
financial auditor’s authorities to cost reports
statements of opinion about determine the
the the financial amount of
government statements taxes payable

Purpose of To guide Helps Shows the Gives Helps in Finds the cost Educates Adds to the
information external and management stewardship credibility to determining of a particular students in the knowledge of
internal users in decision- by the the financial the amount of object field of accountancy
in their making government statements of taxes payable accountancy
economic of public a company
decisions funds

Frequency of Periodic (e.g Whenever Periodic (e.g After every Periodic (e.g Whenever N/A Varies
reports annually, management annually, audit of a set annually, management
quarterly, etc) asks for a quarterly, etc) of financial quarterly, etc) asks for a
report statements report

Intended External and Internal users External and External users Taxing Internal users Students and Primarily
users internal users only internal users authorities only members of members of
the academe the academe

Standards/ PFRS and None NGAS – New Philippine NIRC- None None None
Basis of PAS Government Standard on National
presentation Accounting Auditing Internal
Standard (PSA) Revenue
Code
USERS OF ACCOUNTING INFORMATION
External users of accounting information: customers, creditors, potential investors, government, academe, general public
Internal users of accounting information: management, employees, owners or stockholders
TYPE OF USERS DEFINIITION
CUSTOMERS Main source of income of businesses;
acquire goods and services for a free
CREDITORS Providers of additional funds when the
initial investment of owners is
exhausted; lend resources to businesses
usually in the form of money
POTENTIAL INVESTORS Providers of additional funds when the
initial investment of owners is
exhausted; invest resources in the
business hoping to earn decent returns
GOVERNMENT An external user whose primary role is
to regulate businesses; studies financial
statements to determine amount of taxes
payable
ACADEME Uses accounting information primarily
for academic purposes
GENERAL PUBLIC Citizens and residents of the country
even though they do not plan to transact
with the business; use financial
statements to gauge the condition of the
economy
MANAGEMENT Employees that can make decisions for
the company; considered the brain of
the company
EMPLOYEES Persons in the company aside from
managers and owners or stockholders;
do not have authority to implement
decisions
OWNERS OR Existing investors of the company;
STOCKHOLDERS concerned mostly with the profits of the
company
EXAMPLE OF USERS
Patrons, clients, people
acquiring goods or services
of a company for a free
Banks, lending institutions,
wealthy individuals;
sometimes the government
can also lend resources to a
company
Wealthy individuals, other
businesses planning to invest
Different government
agencies; taxing authorities,
government officials
Professors, lecturers,
students, and researchers
Common people not
connected with the company
Board of directors, top
management, middle-level
managers, supervisors
Laborers, field workers, non
managerial employees
Founders of the company,
owners, stockholders,
partners, proprietos
DECISION MADE USING
ACCOUNTING INFORMATION/
BENEFITS FROM ACCOUNTING
INFORMATION
Whether or not to build relationships
with the business, to have any
dealings with the business
Whether or not to lend resources to
the business, try to see if the business
is not very risky before lending funds.
Whether or not to invest in the
business, primarily concern is the
ability of the business to provide
acceptable returns
Oversees business operations with the
end goal of improving the economy;
checks the accuracy of the financial
statements to compute for the correct
amount of taxes payable
Uses accounting information in the
teaching of accountancy; researches
loopholes and possible improvements
in the field of accountancy
Concerned with the overall
performance of the economy; use
financial information to estimate
economic performance
Uses financial information in making
business decisions; allows
management to identify problems
immediately and to respond
accordingly
Check if the business is profitable
enough to provide compensation and
other benefits
Mainly concerned with the returns
earned from their investment; owners
taking active roles in the operations of
the business; also make decisions