ASSIGNMENT

Research and answer briefly. 1 whole

• Define external and internal users of accounting
data and give examples
• Identify the type and decisions made by each
group of users
• Describe the type of information needed by each
group of users
BRANCHES OF
ACCOUNTING
Chapter 2
Chapter 2: Branches of Accounting
1. Financial accounting
2. Management accounting
3. Government accounting
4. Auditing
5. Tax accounting
6. Cost accounting
7. Education accounting
8. Research accounting
Chapter 2: Branches of Accounting

1. Financial accounting - deals with the

financial transactions of a business.
Types of Report Generated Financial Statements

Purpose of Information To guide external and internal users in

their economic decisions

Frequency of Reports Periodic (e.g. annually, quarterly, etc.)

Intended Users External and Internal users

Standards Basis of Presentation PFRS and PAS

Chapter 2: Branches of Accounting
2. Management Accounting – focuses on the
preparation of reports for use of managers in their
decision-making.
Types of Report Generated Management reports

Purpose of Information Helps management decision-making

Frequency of Reports Whenever management asks for a report

Intended Users Internal user only

Standards/Basis Of Presentation None

Chapter 2: Branches of Accounting
3. Government Accounting – accounting for the
receipt and disposition of government funds.
Types of report generated Periodic financial reports; financial
statements of the government
Purpose of information Show the stewardship by the
government of public funds
Frequency of reports Periodic (e.g. annually, quarterly, etc.)
Intended users External and Internal users
Standards/basis of presentation NGAS
Chapter 2: Branches of Accounting
4. Auditing – examines and evaluates financial
statements of a company independently.
Types of report generated Auditor’s report which contains the
auditor’s opinion about the financial
statements
Purpose of information Gives credibility to the financial
statements of a company
Frequency of reports After every audit of financial statements

Intended users External users

Standards/basis of presentation Philippine Standard on Auditing (PSA)

Chapter 2: Branches of Accounting
5. Tax accounting – lays down the different
treatments of the taxing authorities regarding
financial transactions.
Types of Report Generated Tax returns to be used by taxing
authorities to determine the amount of
taxes payable
Purpose of Information Helps in determining the amount of
taxes payable
Frequency Reports Periodic (e.g. Annually, quarterly, etc.)
Intended Users Taxing Authorities
Standards/Basis of Presentation NIRC
Chapter 2: Branches of Accounting
6. Cost of accounting – finds out the cost of
specific cost objects to help in the functions of
both financial and management accounting.
Types of Report Generated Cost Production Report; other cost
reports
Purpose of Information Finds the cost of a particular object
Frequency of Reports Whenever management asks for a report
Intended Users Internal users only
Standards/Basis of Presentation None
Chapter 2: Branches of Accounting
7. Education accounting – deals with the promulgation
of accounting knowledge to various interested parties
that will aid them in achieving their individual goals.
Type of Report generated N/A
Purpose of information Educates students in the field of
accountancy
Frequency of reports N/A
Intended users Students and members of the academe
Standards/basis of presentation None
 Chapter 2: Branches of Accounting
8.Research accounting – continuous improvement
of the accountancy field through researches and
studies.
Types of report generated Research results

Purpose of information Adds to the knowledge of accountancy

Frequency of reports varies

Intended users Primarily members of the academe

Standards/basis of presentation None

Quiz
Quiz
Identify what branch of accounting performs the following
functions.
______1. provides reports used by internal users only
______2. tasked with the creation of new accounting knowledge
______3. follows the NIRC instead of the PFRS and PAS
______4. provides information to be used by the other branches
of accounting
______5. deals with identifying of economic transactions,
recording such transactions, and communicating the results of
operations.
Quiz
______6. enhances the credibility of the financial statements by
doing an independent examination and evaluation of the financial
statements.
______7. determines the amount payable of each business
______8. controls the accountancy profession in the country
______9. reports generated by this branch of accounting depend
on the request of management
______10. is not required to follow all the pronouncements of the
PFRS and PAS
Group Activity
• Think of at least five companies that operate
within the Philippines. The companies you
select should not come from the same
industry. Identify the branches of accounting
being used by these companies.
• Prepare a 5-10 minutes report to be presented
in class documenting your research.