Accounting in itself is the art of analyzing and interpreting data. It is essential to understand that every individual and business uses accounting one way or another. As an example, an individual may use accounting when evaluating his personal financial information and relays the result to others. Accounting is crucial in every business, whether it is a small family owned company or a multinational. Here are some of the primary types of accounting on the basis of groups served:
Private accounting refers to the accounting activity that is limited to a single company. An accountant who works in this field is required to provide his services and skills to an employer, receiving his paycheck on an employee to employer basis. This term is used for any relationship of the employee-employer type, even if the employer happens to be a public corporation.
This type of accounting refers to the service usually offered by a public accountant to someone in the general public. Considered more professional than private accounting, public accounting occurs when a client-practitioner relationship exists. Public accounting services can be provided by both certified and non certified practitioners, which can in turn be single practitioners or by partnership. Public accounting firms like KAMP Business Accountants can have local, national, or international clientele.
Fiduciary accounting relies on the notion of trust, and can be performed by an administrator, a trustee, an executor, or anyone in a position of trust. The main task of this person is to keep records and prepare various financial reports. They may be under the jurisdiction or authorized by a court of law. In fiduciary accounting, the concept of ownership, a common concept in the other types of accounting, is non-existent.
This refers to accounting for a unit or a branch of government at any given level, be it local, state, or federal. It is generally very similar to other traditional accounting methods. Accountants in this field use double entry systems of accounting, ledgers, and journals. The scope of governmental accounting is to offer service rather than make profit. Because the profit motive cannot be used as a simple efficiency measure in governmental units, new control measures have to be developed. Like any other business entity, governmental units are able to use the services of both public and private accountants. In order to further enhance control, governmental accounting relies on the use of special funds accounting, a system that emphasizes accountability instead of profitability.Share