Accounting is a subject that it has a very wide scope and area for applying application of its. The use of accounting is not confined to the business area in worldwide alone, but it is spread over in all the spheres of the society and in all professions and in all organization like profit and non-profit organization.
So, it is always arising the need of recording and summarizing the transactions and the necessity of finding out the net result of at the same time of a certain fixed period. Accounting is so important that only accounting use can help to overcome the problem of giving the right information and communication of that information to the appropriate persons.
In the modern world, accounting is used in everywhere in every place and it is practiced not only in all the business organizations but also in many non-profit organization like Schools, Colleges, Hospitals, Clubs etc. and also it is practiced in on Government organization.
Normally, it seems that the scope of accounting is confined in business organization but it is not and we can understand that it has undergone lots of changes in recent times. We know, accounting is a dynamic and scientific subject. The scope and area of operation of accounting have been always increasing keeping pace with the changes in present economic changes.
The details are described below about this.
1. Accounting in Personal Life
accounting is the process of gathering, recording and analyzing financial transactions. You can use accounting skills to apply to your personal or everyday life. If you are a student than accounting can help you to analyze the grades that you received from assignments and exams. By summarizing that data, you can analyze it and you can easily focus on ways to improve your grades.
Therefore, accounting skills can be used in handy when it’s time to manage your spending account. You can keep the account of college tuition, books and supplies, living expenses and can get out of your control.
2. Accounting in Business Organization
The role of accounting in business organization is to help the interested parties to record for both internal and external transactions to make business decisions. The accounting process affects the business activities properly. Because, in the accounting process there is measuring and summarizing of business activities or transactions, interpreting financial information and communicating with the results to management and helps to other decision-making.
The scope of accounting in business organization is very wide area and their financial accounting generates some of the key company documents and there is has like profit and loss statement. Financial accounting in business also produces the balance sheet which provides the valuable information to business’s about assets, debts and equity at a specific moment in time.
Without these financial accounting documents it would be very difficult to run the business organization. So the area of accounting in business organization is very important.
3. Accounting in Non-business Organization
It is not aim to non-profit organizations to making profit. But it can not avoid account keeping. The importance of bookkeeping in non-profit is very valuable. The non-profit organizations must keep up proper accounts of its receipts, payments, incomes, expenses, because those who have donated money to such institution must know that their money is being used properly. So, in non-profit organization accounting is a must.
The object of accounting in non-profit organization is to do good to the members through proper clearness about their money expenses. The object of these organizations is too good to the society and such institutions are clubs, schools, colleges, hospitals and libraries etc.
4. Accounting for Government Institutions
The government agencies always need accountants to achieve the objective of accountability, financial information must be both relevant and reliable for reasonably informed users. The governments agencies always need accounting information to help of making them plan, budget and divided government funds. The different types of government’s department, ministry, offices and corporation etc, they can not walk without accounting.
5. Accounting for the Professionals
The professional people like Doctor, engineer, lawyer etc earn enough money and they have to keep account of their money. The importance role of accountants in business is to ensure the quality of financial reporting. So, the scope of accounting in professional is very large and wide. Sometimes the professional like doctors, engineers have to pay tax from their income. For this reason, they have to take proper account of their income. Therefore, the system of keeping of their account is different of business organizations.
Form the discussion form above, we can say that the using of accounting is spreading in every sphere of society. The present age is technology age and in this age importance of using accounting in everywhere is increasing day by day.