Accountancy refers to systematic knowledge of accounting concerned with the principles and techniques which are applied in accounting. It tells us how to prepare the books of accounts, how to summarize the accounting information and how to communicate it to the interested users.
ACCORDING TO KOHLER
“Accountancy refers to the entire body of theory and practice of accounting.”
It is wider in scope than book-keeping and accounting. It is a body that consists of the guiding principles and rules of book-keeping and accounting.
FEATURES OF ACCOUNTANCY
SYSTEMATIC AND SCIENTIFIC BODY OF KNOWLEDGE: It is the systematic and scientific body of knowledge consisting of rules and principles of accounting.
NATURE: Accountancy is analytical in nature and needs specific and specialized skills, expertise and knowledge.
SCOPE: Accountancy is wider in scope and involves both book-keeping and accounting.
SCIENCE AND AN ART: Accountancy is a science as it is based on certain principles which are universally applicable. These principles are based on experiments and observations.
It is an art as it requires specialized skills and knowledge. Some personal judgments and certain assumptions are requires while maintaining the books of accounts.
CONSTITUENTS: Accountancy consists of principles, postulates, assumptions, conventions, concepts and rules that govern maintenance of accounts.
RELATION: It depends on book-keeping and accounting.
FUNCTION: It includes the decision making function which is based on the information provided by book-keeping and accounting.
The main objectives are:
- To keep the systematic records of accounts.
- Helps the management to take decisions about business operations.
- Aims at showing the accurate financial position of the business.
- To ascertain the true profit and loss of the business.
- Helps in complying with the legal requirements of various authorities.
- Helps in detecting the various frauds and errors.
- Aims at communicating the financial information to the various users.
Thus, accountancy is main head under which book-keeping and accounting prevails. Without this, it is impossible to perform any operation of book-keeping or accounting.