Functions, Objectives, Activities, and Types of Accounting

To understand further about the field of accounting, you need to study the functions, objectives, activities, and also the types of accounting that are often used by the public. Accounting itself is an activity or process in identifying, recording, clarifying, processing, and presenting data related to finance or transactions. Every company needs accounting to manage the business it runs. With accounting, business owners can more easily find out the condition of their company so that they can make the right decisions for their company.

Accounting Function
Accounting is needed by companies to serve as a basis for decision making. With accounting, a company will get two kinds of important information related to the business it is running, namely information about company value and also information about the company's profit / loss. Thanks to these two pieces of information, the company can make the right decisions regarding the company's current financial condition.

The accounting process can also be used as a basis for calculating taxes that must be borne by the company. With the accounting process, companies can also provide detailed explanations to banks and investors about the current condition of the company when at any time you need a business capital loan.

Accounting Purposes
The following are some of the objectives of the accounting process:

• Provide financial information including capital, expenses, and economic resources.
• Presents information about changes in the company's economic resources.
• Provide information about changes in company obligations.
• Estimating the company's potential for profit based on financial statements.
• Delivering information related to financial reports in more detail.

Main Activities in Accounting
In accounting there are three main activities, including:

1. Identification Activities
This activity aims to identify various transactions that occur within the company. Through the identification process, the company will get comprehensive data.

2. Activity Logging
After various company transactions are identified, the company will then record these transactions in the form of financial statements.

3. Communication Activities
The next step that will be taken is to communicate the results of the notes to those who need communication information reports, both internal and external to the company.

Types of Accounting
After knowing the functions, objectives, and accounting activities, we will now discuss various types of accounting. Here are the types of accounting that you should know:

Financial Accounting
Financial accounting is a type of accounting that is most widely used by the wider community. This accounting studies financial transactions, such as debt (liabilities), capital, and changes in company assets.

Management Accounting
This type of accounting can provide real data to the management of the company and then make this data the basis for determining company policy.

Cost accounting
Companies take advantage of cost accounting to streamline production costs and other costs.

Tax Accounting
Tax accounting aims to manage taxation problems. With this accounting, companies can reduce the amount of taxes that must be issued without violating applicable rules.

Audit Accounting
Audit accounting is also known as auditing. In this accounting, the auditor conducts an examination of the accounting records or financial reports by an independent accountant without any pressure from any party.

Budget Accounting
Budget accounting aims to study the budgeting and expenses of a company. After that, the data obtained will be compared with the actual expenditure.

This is an overview of the functions, objectives, activities and types of accounting. For those of you who need software that can simplify the accounting process, you need to consult a trusted accounting software provider. For this reason, Soltius Indonesia is here to help you by providing solutions regarding the best accounting software products.