Accounting has three branches and each branch of accounting is inter - related with other branch. No one branch is perfect without other branch of accounting. Every branch of accounting works only if other branch of account will perform best.
Now we discuss these three branches with following way :-
Financial accounting is the old branch of accounting which is related to make profit and loss account and balance sheet after maintaining daily record of business transactions. Profit and loss shows net profit or net loss for a specific period and balance sheet shows the financial position on the specific date.
Cost accounting is that branch of accounting which is related to calculate of total cost or per unit cost of goods or services. Its aim is to reduce cost of production and increase businessman’s profitability. In other words , it is used in an organization for controlling the cost .
Management accounting is that branch of accounting which is related to use accounting information for determination of policies and other business decisions . It uses the accounting information for analysis the efficiency of different department of an organization.