Scope of Accounting

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