Just as there are many types of economic decisions such as saving investing spending etc, there are many types of accounting information. The term financial accounting, managerial accounting and tax accounting often are used in describing three types of accounting information that are widely used in the business community that are discussed below.

1. Financial Accounting

Financial accounting refers to information describing the financial resources, obligations and activities of an economic entity (either an organization or an individual). Accountants use the term financial position to describe an entity’s financial resources and obligations at one point in time and the term result of operations to describe its financial activities during the year.

Financial accounting information is designed primarily to assist investors and creditors in deciding where to place their scarce investment resources. Such decisions are important to society, as they determine which companies and industries will receive the financial resources necessary for growth and which will not. financial accounting information is used for so many different purposes that it often is called general purpose accounting information

2. Managerial Accounting

Managers develop the accounting interpretation or receive this information from their specialist accountants.managers use this information in setting the company’s overall goals, evaluating the performance of departments and individuals, deciding whether to introduce a new products, and in making virtually all types of managerial decisions.

3. Tax Accounting

The preparation of income tax returns is a specialized field with in accounting to a great extent, tax returns are based on financial accounting information. However the information is often adjusted to conform with income tax reporting requirements. the most challenging aspect of tax accounting is not preparation of income tax return. but tax planning. tax planning means anticipating the tax effect of business transactions and structuring these transactions in a manner that will minimize the income tax burden.

Planning for retirement is a complicated process. It isn’t as easy as burying money in Mason jars out in the back yard. And besides very few people really have the discipline to set aside money on their own without incentive and encouragement from their employers and financial planners.

Today’s workforce is very different than it was a generation ago. No longer are people staying with the same company for twenty, thirty or even forty years like their parents or grandparents may have done. Employees are much more mobile and likely to change jobs every few years to seek advancement and higher pay. Likewise, companies are not as loyal to their employees as they once were. With mergers and downsizing, employees are not the long-term valuable asset they once were.