Accounting is a dynamic and applied subject.
Through a long practice and research Accounting has reached its present stage and earned the status of the profession.
Like other social sciences, Accounting also has its characteristics.
By analyzing the various definitions of Accounting, we can point out the following features.
Accounting as a social science
The task of Accounting is to keep accounts of all economic activities of social human beings particularly financial transactions of trade and commerce in a correct and systematic way.
In modem age, the scope of Accounting is not confined only to business organizations, but it also comprises the economic activities of all individuals and social organizations.
It has got similarity with other social sciences like Economics, Management, Psychology, Computer, etc.
Accounting as an art and a science
With the help of Accounting, a businessman keeps accounts of financial transactions of his business following a definite way and method.
Accounting is an art. It takes a lot of efforts and long experience to attain expertise in Accounting.
Art is the way of achieving and applying correct methods and techniques in the light of experience.
For this reason, we can term Accounting as an art.
Science means a disciplined knowledge of a particular subject. With the help of this knowledge, some general rules are established.
It is observed that in case of accounting also, some rules are formulated to determine and analyze the nature and result of economic activities of a person or an organization.
These rules are formulated following scientific methods – observation, experience, analysis, classification, etc.
For this reason, Accounting can be termed as a science. But Accounting is not a natural science; it is a social science.
System of keeping accounts of transactions
Accounting teaches us the methods or techniques of recording the financial transactions of an individual or an organization as permanent references for future use.
As a result, one can easily have a clear idea regarding the nature and result of every transaction when needed without exercising memory too much.
Transactions measurable regarding money or money’s worth
Events measurable regarding money or money’s worth are the subject matters of Accounting.
It is necessary to keep the accounts of those transactions which can be measured regarding money and which affect the financial position of an organization.
The feelings and emotions of human beings such as pleasure, sorrow, laugh, cry, etc. are not the subjects of Accounting as these are not measurable regarding money.
Exhibiting financial affairs
Accounting teaches us the systematic and correct methods of keeping accounts of all financial transactions.
So one can have a clear idea about the financial position of one’s business, i.e., debtors, creditors, liabilities, capital, assets, and property. ,
Scope or field
Though Accounting is very much important for the business organization, its importance for other organizations and individuals also cannot be ignored.
In the present day, world accounts are needed to be kept in all types of concerns whether it is a business concern, social organization, semi-government, or government Organization. So the scope or field of Accounting is very much wide.
Under Double Entry System of Accounting, every transaction has two aspects, e.g., two accounts – one is debit, and the other is credit.
For this reason, every transaction classifying it into two parts is accounted for.
Accounts are maintained in a self-sufficient method.
With the help of Accounting, one can know the nature and causes of every transaction as well as overall results of all the transactions at any time.
Tools of management
Accounting helps management in making and implementation of projects, decisions, production, distribution, cost minimization, etc., providing various information and data.