Unit-2 Nature and Scope of Accounting

This unit elaborates the need for accounting and then discusses the nature, scope and importance of accounting.

Define accounting.

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Learning Pundits Content Team

Written on Apr 17, 2019 2:18:47 PM

Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business. Accounting also refers to the process of summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities. The financial statements that summarize a large company's operations, financial position and cash flows over a particular period are a concise summary of hundreds of thousands of financial transactions it may have entered into over this period.

Accounting involves a series of activities, as listed out in the scope of accounting. These activities are : (1) identifying, (2) measuring, (3) recording, (4) classifying, (5) summarizing, (6) analyzing, (7) interpreting, and (8) communicating, the financial transactions and events