What are the Major Types of Accounting?

The objective of accounting is to give info at any given period about the outcomes attained over time that is valuable to its handlers for making the right decisions with rationality and efficiency. It is a discipline that follows the method to generate and then apply certain theory and also processes the following;

Accounting Theory

It is about the set consisting of rules, principles, techniques, procedures, criteria and instruments that are the basis of accounting.

Accounting Process

It is about the set of steps that are part of the development for the fulfillment of the goals that an entity has, which includes the following;

Systematization
Valuation
Processing
Evaluation
The results in information

Types of Accounting

Accounting can be classified into two branches, depending on the division criteria used. According to the type of economic unit to which the generated accounting information refers, the following classification can be made;

Macro Accounting

It gives methodical numerical picture of a country’s economic activities for a certain span. It is explained by the states and it gives valuable info which is helpful in guiding the country’s economic policy.

Micro Accounting

It is accounting for little financial units. Its objective is to give info that can be utilized in the process of making important decisions. Micro accounting is executed by different public administrations and private businesses.

In business accounting, the handlers of accounting info can be distributed as the internal and the external handlers.

The Internal Handlers

They are comprised of all the persons who utilize the info from within the business for making the suitable decisions.

The External Handlers

They utilize accounting info for the management of the business which is subject of the information and it includes all those individuals as well as bodies which do not contribute in the management like shareholders, investors and the auditors. Depending on the users of accounting, the distinction is made between financial accounting and management accounting.

Although accounting can be done manually, the use of computer applications is currently widespread that facilitates accounting work. Computer software or applications are intended to systematize and simplify these tasks in the company. The applications can be limited to the preparation of the accounting or be integrated with the rest of the computer system of the company such as billing, payroll, inventory, etc.