What is Accountancy? Meaning, Features, and More.

हिन्दी में पढ़ें:

In the organization, economic transactions/events are managed through accounting which includes processes such as identification, measurement, recording, classification, summarization, analysis, interpretation, communication, etc., that help in generating accounting information and communicating that information with the concerned users, but when and how these procedures are to be followed or what rules, concepts, principles, etc. are to be followed while managing economic transactions is told by accountancy.

Generally, the terms accounting and accountancy are used interchangeably but both have their own characteristics and differences as accounting is a process of managing economic transactions while accountancy is a body of knowledge that explains why, how and when accounting is used. For example, recording transactions in the books is accounting while how to record transactions in the books is accountancy.

What is Accountancy?

Accountancy is a body of knowledge that explains why, when, and how accounting is used and for this, it provides various rules, concepts, principles, methods, formats, etc. In other words, accounting is a framework used to manage economic transactions. Accounting is taught as a subject and chosen as a profession and its scope is wider than accounting and bookkeeping as both are a part of accountancy.

Accountancy is used universally as economic transactions take place everywhere and accounting is used to manage economic transactions which is based on accountancy. To ensure better use of accountancy, many national and international bodies have been formed which regulate accountancy. Note: Book-keeping and accounting are a part of accountancy.

Features of Accountancy

Following are the features of accountancy:

1. Body of Knowledge:

Accountancy is a body of knowledge because it consists of various rules, concepts, principles, formats, methods, etc. that are used to manage the economic transactions and another reason is that it is complete in itself and because of this it is also taught as a subject and also chosen as a profession.

2. Systematic:

Accountancy is systematic because in accountancy or while using it everything is done one by one like chronologically, etc. with the theoretical framework. For example, the process of accounting starts with identification and ends with communication, during this process there is no back-and-forth stage, all the stages happen in sequence.

3. Subject:

Accountancy is taught as a subject because it is a body of knowledge and is complete in itself. For those who study in the commerce stream, it is a compulsory subject, and no alternative subject is available in its place, as accountancy is one of the basic subjects for commerce stream students.

4. Profession:

Accountancy is chosen as a profession because a person having knowledge of accounting is called an accountant and the demand for accountants in organizations is increasing day by day. Accountants have a vital role in any organization as they prepare accounting information that shows the organization’s performance, growth, etc. in numbers.

5. Wider Scope:

The scope of accountancy is wide as it not only involves managing economic transactions but also includes many other areas like costing, taxation, auditing, etc. If it is compared with accounting and bookkeeping, its scope is wider. Note: Both accounting and bookkeeping come under accountancy.

6. Universal:

Accountancy is used universally as economic transactions take place everywhere which need to be managed, and it helps in managing these transactions and preparing reports related to them. Accountancy is not only used in organizations, but common people also use it knowingly or unknowingly.

Read Also:

• What is Accounting? Meaning, Features, and More.
• What is Book-keeping? Meaning, Features, and More.

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