General accounting, analytical accounting, cash accounting, commitment accounting, budgetary accounting, and public accounting all have their specificity and usefulness.
Overview of the several types of accounting, comparative table to see more clearly, and some software to accompany you!
General accounting or financial accounting
General accounting is keeping a company’s or organization’s accounts chronologically.
Except for micro-enterprises, it is mandatory, and it lets you determine your financial health and the value of your assets by providing a series of accounting documents:
- The income statement lists the income and expenses of the company,
- the balance sheet maps the assets by listing the assets (what the company owns) and the liabilities (what the company owes),
- The accounting appendix provides valuable details for understanding the income statement and the balance sheet.
These records are required to explain the company’s financial condition to potential and present investors, suppliers, banks, consumers, and the state for tax purposes.
It is worth noting that accounting is founded on several fundamental concepts, including the continuity of operation premise, the independence of exercises principle, and the caution principle.
Cost accounting or management accounting
What is the difference between general accounting and management accounting?
While general accounting provides an overview of the company’s financial statements, management accounting analyses and interprets them to aid decision-making, its goal is to break down the costs of each value production by assessing profitability:
- The worth of a product, a project or activity, or inventories (with the variable cost margin, for example).
The goal is multifaceted:
- Identify what causes losses and generates profit, the levers of growth, the areas to be optimized, and a strategy to close the gap between predictions and boost total profitability.
- Provisional dashboards, a financing table, or a GIS table are just a few examples (intermediate management balances).
Cash accounting
Cash accounting keeps track of how much money comes in and goes out of a company. Based on the bank account activities, it makes an accounting entry for each receipt and disbursement.
The BNC (non-commercial profits) system is reserved for sole proprietorships, whereas under the BIC (industrial and commercial profits) regime, it is reserved for specific companies. It is a straightforward method and takes less time than commitment accounting. Therefore, it is less expensive.
Commitment accounting
Cash accounting keeps track of how much money comes in and goes out of a company. Based on the bank account activities, it makes an accounting entry for each receipt and disbursement.
The BNC (non-commercial profits) system is reserved for sole proprietorships, whereas under the BIC (industrial and commercial profits) regime, it is reserved for specific companies. It is a straightforward method and takes less time than commitment accounting. Therefore, it is less expensive.
Budget accounting
Budget accounting oversees planning budgets for future years. It only considers budgeted expenditures and revenues for a particular accounting year that have been previously validated. It ignores the following factors:
- Debts and receivables are examples of assets and liabilities.
It is not required but is frequently used to manage and regulate the company’s budget. It allows modifications for future projections by allowing visibility into the variances with the forecast.
Public accounting
The accounting that communities and public administrations keep accounting for expenditure and revenue is known as public accounting. It follows the same concepts as the general accounting plan, including private general accounting, double-entry, and depreciation.
It allows for determining the public budget after the promises have been communicated. It will then be possible to examine whether the budgeted spending matches the budgeted amount. Finally, whether the organization is in budget surplus or deficit is determined by the difference between revenue (the various taxes collected) and spending.
As we have seen, there are different sorts of accounts. Accounting types alter and apply differently depending on your company’s legal status and size.
On this issue, if you want to learn about all your company’s accounting duties, browse our section dedicated to this purpose.
National accounts
National accounting aims to give a schematic and quantifiable representation of a country’s activity and forecast how an economy will develop. As a result, national accounting is a tool for forecasting that helps a country discover answers.
Cross-checking several sources of information yielded the information.
The GDP, which is the sum of the added values created by all economic agents present in the region, is the most well-known piece of information.
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