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Accounting has been described as the cornerstone of modern businesses, and it’s little surprise that it has become one of the most common terms, especially during the taxation period. If you belong to this field, you must have heard about the branches of accounting and their importance in the systematic tracking of business transactions.
What is Management Accounting?
By definition, management accounting, sometimes called managerial accounting, refers to the process of analyzing, assessing, and providing valuable financial information to help in the day-to-day running of a company’s critical business operations.
This branch of accounting helps a company’s internal teams make well-informed financial decisions in pursuit of primary objectives. It is different from financial accounting in the sense that its sole purpose is to help the internal users make better financial decisions.
What are Debits and Credits?
In modern bookkeeping, debits and credits are two related terms you just can’t ignore. These are two useful entities with opposing effects when balancing the books.
In summary, debits (DR) refer to a record of the total funds flowing into the account. On the other hand, credits, abbreviated as CR, denote all the funds flowing out of the account.