ACCOUNTANCY

Table of Contents

ACCOUNTANCY

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.

OBJECTIVES

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.

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AccountingNon profit organisationDepreciationLiquidity ratios
Nature of AccountingReceipts and Payments AccountDepreciation AccountingAcid Test Ratio
Benefits of AccountingScope of accountingHire Purchase AccountingCash Ratio
Difference between cost accounting and financial accountingFinancial accounting, cost accounting and management accountingDifference between hire purchase and instalment systemFinancial ratio analysis
Difference between transaction and eventTransactionsUsers of AccountingRatio analysis
Limitation of AccountingCapital ExpenditureInstalment SystemDifference between consignment and sale
Book KeepingRevenue ExpenditureReserves AccountingAbnormal loss vs normal loss in consignment
AccountancyDifference between capital and revenue expenditureProvisions Treatment of loss on consignment
Accounting as science or an artAccounting EquationSingle entry systemAccounting treatment of consignment
Book Keeping vs accountingDeferred Revenue ExpenditureDifference between statement of affairs and balance sheetJoint venture vs consignment
Book keeping vs accountancyCapital receiptIFRSDepartmental Accounting
Accounting vs accountancyRevenue receiptBalance SheetMethods of departmental accounting
Basis of AccountingDifference between capital and revenue receiptProfit and loss AccountAllocation of expenses in departmental accounting
Branches of accountingDifference between accounting concepts and conventionsTrading AccountInter-departmental transfers
Cash and mercantile system of accountingAccounting StandardsVoyage AccountDifferent types of branches
Accounting PrinciplesObjectives of AccountingAccounting for Incomplete VoyageDepartmental vs Branch accounting
Golden rules of accountingProcess of AccountingJoint ventureMethods of branch accounting
Double entry system of book keepingScope of AccountingJoint Venture Vs PartnershipIncorporation of branch trial balance
Double entry vs Single entry systemAccounting Concepts vs Accounting conventionsMethods of recording transactions in Joint VentureGarner VS Murray Rule
History of AccountingDifference between provisions and reservesConsignment

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