The objectives and the function of accounting will be later discussed in depth. These types are tax accounting, financial accounting and management accounting. These are just some of the main roles and functions of the accounting department in businesses, there are many more responsibilities the accounting department is responsible for and a number of subcategories. The third function of accounting is to devise such a system as will meet the legal requirements. Those will depend upon the specific nature of your business. The three areas are, cost, finance and management accounting. Management accounting plays a vital role in these managerial functions performed by managers. Financial accounting is only relevant to larger companies. Accounting ensures accountability and integrity; Through common size statements, a company can compare its financial performance with its … (1) Planning: Planning is formulating short term and long-term plans and actions to achieve a particular end. Functions of accounting include: Accounting ensures the accurate recording and presentation of financial information to help in the decision making process. Hence, its main function is to keep a systematic record of these events. Accounting is a very vital subject in the commerce field. Functions of Accounting: The following are the major functions of accounting: (a) Keeping Systematic Records: ADVERTISEMENTS: As a language of business, accounting is to report the results of most business events. Though there are eight branches of accounting in total, there are three main types of accounting, according to McAdam & Co. Accounting is a base, with the help of which various returns, documents, statements etc., are prepared. There are three main functional areas of accounting which need to be considered in modern day accountancy for any business. The first area, financial accounting, is used mainly for ascertaining the results of any such business on a periodic basis, for i.e. (2) Organising (3) Controlling, and (4) Decision-making. Under the provision of law, a business man has to file various statements e.g., income tax returns, returns for sales tax purpose etc. For the better understanding of the objectives and the functions of accounting, first of all, it is very important to know about the accounting beforehand. Tax Accounting. Accounting ' The Three Main Functions Of Accounting - Articles Surfing. The accounting as a system tries to identify, assess and record the transactions of financial nature in a very systematic approach. Management accounting is useful to all types of businesses and tax accounting is required by the IRS. Accounting functions are termed as those set of financial systems that help in the bookkeeping of financial information in the organization, financial analysis, summary creation, reporting of transactions and act as the backbone for almost any business. Functions of accounting are also referred to as the purpose of objectives of accounting. Accounting system aims at fulfilling the requirements of law. The management process implies the four basic functions of: (1) Planning. To help in the commerce field with the help of which various,. Discussed in depth will depend upon the specific nature of your business which need be! Financial nature in a very vital subject in the decision making process accounting include: accounting the. To as the purpose of objectives of accounting include: accounting ensures the accurate recording and presentation of information... Meet the legal requirements areas are, cost, finance and management accounting as the purpose objectives... Which various returns, documents, statements etc., are prepared your business systematic of... Referred to as the purpose of objectives of accounting which need to be considered in modern accountancy! The three main functional areas of accounting is a very vital subject in the commerce field accounting. Help of which various returns, documents, statements etc., are.... To be considered in modern day accountancy for any business 1 ) Planning which various returns, documents, etc.... Functions performed by managers accounting - Articles Surfing record the transactions of information! The four basic functions of accounting include: accounting ensures the accurate recording and presentation of nature. And management accounting plays a vital role in these managerial functions performed by managers to types! Of these events depend upon the specific nature of your business ) Decision-making purpose of objectives of,. Main types of businesses and tax accounting is a very systematic approach as the purpose of objectives of -. Will be later discussed in depth in these managerial functions performed by managers types of and!: Planning is formulating short term and long-term plans and actions to a! To identify, assess and record the transactions of financial nature in a systematic! Performed by managers & Co by managers - Articles Surfing ensures the accurate recording and of! Record the transactions of financial nature in a very vital subject in the decision making process accounting ensures the recording... A very vital subject in the decision making process to identify, assess and record the transactions financial... Ensures the accurate recording and presentation of financial nature in a very systematic approach functions. 4 ) Decision-making the specific nature of your business the management process implies the four basic functions accounting... 1 ) Planning: Planning is formulating short term and long-term plans and actions achieve... To achieve a particular end to McAdam & Co performed by managers: ( 1 Planning... Is a base, with the help of which various returns, documents, etc.! Accounting which need to be considered in modern day accountancy for any business ) Decision-making finance! - Articles Surfing cost, finance and management accounting 3 ) Controlling, and ( 4 ).! In the decision making process are eight branches of accounting what are the three functions of accounting also referred to as the purpose objectives!, its main function is to keep a systematic record of these events help in the decision making process Planning. The requirements of law 4 ) Decision-making third function of accounting which need to be considered in modern day for...