Types of accounting

1 Accounting science

2 Definition of accounting

3 accounting functions

4 Bodies concerned with accounting information

   4.1 Management of the company or origin

   4.2 Facility owners

   4.3 Employees of the company

   4.4 Creditors

   4.5 Government

   4.6 Investors

5 types of accounting

   5.1 Financial Accounting

   5.2 Cost Accounting

   5.3 Tax Accounting

   5.4 Management Accounting

   5.5 Governmental Accounting

   5.6 Accounting review: 

Accounting science 

We often hear about accounting and the job of an accountant, but all of our background is limited to compiling numbers and discounting accounts only, but there is a lot of what is involved in the science of accounting, it is not so simple.

 Definition of accounting

 The accounting process is a process that identifies, measures and records the financial and financial information related to economic establishments and units, whether they are commercial, industrial, agricultural, or even service, and then communicates this financial information to those interested in it, such as the government, owners of companies, investors, workers, and others.

 Accounting jobs

 The definition of accounting leads us to the presence of four functions and steps that the process or accounting cycle performs to end its mission, namely:

 Selection process:

 It is intended to determine the financial operations that must be taken care of and supply periodically or temporarily, that is, to define the nature of these tasks in terms of being financial, such as the process of selling goods and services and purchasing raw materials and production requirements, or non-financial ones such as employment decisions for new workers.

 Measurement process:

It is the step that follows the determination of financial operations, so after completing their determination we begin measuring them in the financial unit, meaning measuring the value of the financial process in the currency used; For example, determining the sale of a commodity is measured by its value being 10 thousand riyals. There are several financial measures that are not measurable. The decision to employ new workers can only be measured financially after the appointment and delivery of salaries.

 Registration process:

After measuring financial operations, they must be installed in the accounting books using the known scientific methods, and the registration process is an accumulated documentation of the financial operations of any facility over the years.

 Delivery process:

After determining, measuring and recording financial operations, its results must be communicated to those who are interested in them and those in charge of them, and the process of communicating financial information is carried out through the preparation of financial reports and financial statements, such as the income statement, the statement of financial position, the statement of cash flows, the list of change in property rights and finally

Comprehensive income statement.

 After preparing the financial statements, it is the auditor's turn to analyze and interpret these lists for the stakeholders. Based on the analysis of these financial statements, executive decisions are taken.

 The authorities concerned with accounting information

Company or facility management

Small business management differs from that of large companies. A small business is often its managers are its owners, while large companies are managed by specialized experts who are often employees of the company and not its owners, and in both cases the company needs financial information to make the right decisions from monitoring and planning to measuring performance and return on capital and production costs and determining profit and liquidity And then knowing the financial position of the company, and all that important information determined by the accounting department and providing it to management to make the right decisions.

 Owners of the facility

When management is among the employees and not the owners of the companies in the case of large companies, the owners of the companies are interested in tracking their companies' business, profits or losses and production costs, and accordingly the decision is made to either continue the investment or change the strategy or management or other important decisions.

Company employees

Every worker seeks to achieve job security and stability, and what is guaranteed to do so is the development of the company in which he works and his growth and achieving high profit rates, which is related to increasing rates of wages, incentives and rewards and improving the standard of living sought by the company, and therefore they are interested in knowing the financial statements and news of the company that They work out.

 The creditors

Those with debts that the company must pay, such as banks, investment companies and other financing parties, in addition to the companies from which it buys goods and services or production requirements in the future, all of these people are interested in knowing the financial position of the company to check on their money and ensure the company's ability to pay in time. Moreover, all banks analyze the financial statements of companies to ensure that their financial position is correct before any loans are granted.

the government

 The competent government agencies are concerned with reviewing and monitoring the financial statements of companies, especially the Tax Authority, to ensure that the company’s accounts are not tampered with and pay the taxes imposed on them in accordance with the regulations stipulated by the law.

 Investors

 In the situation of large companies that issue securities such as stocks and bonds, the investor is concerned, before purchasing any of these securities, to see the financial position of the company, especially in recent years, to ensure the preservation of his money and to ensure the abundant profit from his investment, as well as in the case of entering a new partner , He must review the financial statements of the company to ensure its success and profitability as well as ensure its continuity.

 There are a lot of other people interested in the financial statements of companies such as universities, research centers, financial consulting offices, as well as clients.

 Types of accounting

There are several types and areas of accounting, including financial accounting, cost accounting, administrative accounting as well as government accounting and auditing, and they differ from each other in the functions and areas that they perform.

Financial Accounting

Financial operations are studied, analyzed, recorded, measured and summarized in order to know the level and average performance of companies in a specific period, usually a year or half a year. The company's management, regulators, investors and others interested in the company's performance use financial accounting data. The most important financial statements are the income statement and the financial position list.

 Cost accounting

 This specialization is used to measure the value of the cost per item, whether it is a good or service, and to control costs and contribute to planning and taking the necessary decisions, and cost accounting calculates the cost of purchasing production services from raw materials, wages and expenses and collecting those costs to determine the final cost.

Tax Accounting

 The value of the taxes assessed on the company is calculated based on the general financial statements and statements, and in accordance with the laws of the state; The tax value differs from one company to another in terms of: type of income, type of activity, and assets owned. Administrative Accounting collects financial data from all other accounting departments, such as cost accounting, financial and tax accounting, and submits it to the company’s management, and based on all of that the administration makes the necessary administrative and executive decisions, such as planning, control and performance measurement, so the administrative accounting data is often confidential and is not seen. Except management.

 Governmental Accounting

 This branch of accounting prepares the financial statements and statements of government agencies, it also analyzes state resources and carries out oversight of public funds in those bodies, controls expenses, and then submits these data to government authorities. 

Accounting audit 

undertakes oversight of all previous accounting departments and their types, and to ensure the correctness of the data and reports provided by these departments, in order to increase the credibility of the information and financial statements of the company, and auditors work begins at the end of the accounting period when the accounting departments submit their various reports and finish preparing the financial statements of the company.