PERFORMANCE TASK #2

Answer the following questions:

1. What are the common branches of accounting?

 Financial Accounting
 Management Accounting
 Government Accounting
 Auditing
 Tax Accounting
 Cost Accounting
 Accounting Education
 Accounting research

2. Elaborate the common branches of accounting.

 Financial Accounting – is the branch of accounting that focuses on

general purpose financial statements. General purpose financial

statements are those that cater to the common needs of wide range of
external users.
 Management Accounting – involves the accumulation and
communication of information for use by internal users. An offshoot of
management accounting is management advisory services which
include services to clients on matters of accounting, finance, business
policies, organization procedures, product cost, distribution, and many
other phases of business conduct and operations.
 Government Accounting – refers to the accounting for the
government and its instrumentalities, focusing attention on the custody
of public funds, the purpose or purposes to which those funds are
committed, and the responsibility and accountability of the individual
entrusted with those funds.
 Auditing – involves the inspection of an entity’s financial statements
or business process to ascertain their correspondence with an
established criterion.
 Tax Accounting - is the preparation of tax returns and rendering of
tax advice, such as the determination of tax consequences of certain
proposed business endeavor
  Cost Accounting – is the systematic recording and analysis of the cost
materials, labor, and overhead incident to the production of goods or
rendering of services.
 Accounting Education – refers to teaching accounting and
accounting-related subjects in an organized learning environment.
 Accounting research – pertains to the careful analysis of economic
events and other variables to understand their impact on decisions.

3. What is the difference between financial and management accounting?

 The difference between financial and management accounting is

that financial accounting is the collection of accounting data to
create financial statements, while management accounting is the internal
processing used to account for business transactions.

4. What are the two broad classifications of users of accounting? Explain

briefly each classification.

 The two broad classifications of users of accounting is Internal users and

external users. Internal users include managers and owners of the business
whereas external users include investors, creditors of funds, suppliers of
goods, government agencies, general public, customers and employees.