The scope of accounting indicates field or area where
accounting is used. The scope of accounting is very wide .It is applicable not
only to business organizations ,but also to non-business organizations,
government and non-governmental organizations ,various professionals and
individuals in their monetary affairs. Generally, it covers the following
areas:
a)Accounting for business organizations: Business
organizations are the largest field of accounting activities. They are
established for earning profits .Accounting is useful for determining profits
or losses of such organizations .It is useful to know their debtors, creditors
,assets and liabilities.
b)Accounting for non-trading organizations: Non-trading
organizations are established to provide services to the general publics.
Hospitals ,clubs, societies ,educational institution etc .are the examples of
non-profits organizations, which have to prepare Income and Expenditure Account
to present their incomes and expenditure for a particular period.
c)Accounting for government and non-governmental
organizations: Government has the biggest responsibilities for providing
welfare, services, peace, security, justice etc, to the people. For this,
government uses several financial resources. Accounting system which is used in
government organizations is called Government Accounting.
d)Accounting for professionals and individuals: Accounting
is also useful to the professionals and individuals to exhibit their
professionals and personal efficiency. Professionals are engaged in the jobs of
specialized knowledge and skills ,called professional skill
Scope of Accounting is wide and extends in Business, Trade, Government, Financial institutions, individuals and families and and every other arena. Accounting principle is used in every step.
ReplyDelete