What Is Accountancy

One of the most striking developments of business organization today is the way in which methods of record and control have kept pace with, and in fact made possible, the steady increase in size, volume, and complexity of business operations. This has been due to the modernization of accounting methods by which all business transactions are fully and accurately re- corded and their results interpreted. Accordingly as business increases in volume and complexity, new and more difficult problems of finance and management arise, accounting takes a higher and more important position, and the need for a better knowledge of the subject on the part of business men as well as account- ants is more clearly and more generally recognized.

Owners and executives now look to accounting records to give them prompt and accurate information and guidance on matters which a few decades ago were left to conjecture, but which today are closely watched and controlled. As a result of this the demands made upon the art and skill of the accountant in reducing masses of data to orderly systems of record and control are steadily increasing, and there has come about a remarkable development of accounting methods and practice.

Modern accounting methods have thus be- come, to an extent not realized by those who have not followed their recent developments, an essential part of the mechanism of every highly organized and efficient business enterprise. The financial worth of a business may be clearly read from its balance sheet and profit and loss statements. Comparative statements and supporting schedules will show as clearly where it has been gaining or losing and its general trend. To the accountant or to the business man with some knowledge of accounting, such facts are easily gained from the accounting records and are invaluable as a basis for judgment and action. To the many business men, however, who know little or nothing of account- ing, these same records are almost meaningless and their facts are inaccessible.

What Is Accountancy

Accountancy has been defined as the profession which has to do with the recording, presenting, and verifying of facts concerning the acquisition, production, conservation, and transfer of values. This definition, like other exact definitions, would need considerable elaboration to give a full and clear understanding of the aims and methods of modern accountancy. It furnishes, however, a logical and convenient classifica- tion of the work of accountancy into three main functions :

1. Recording the financial transactions of a business.

2. Summarizing the results and thus showing the effect of these transactions upon the business.

All the ordinary and usual business happenings can be properly recorded by any intelligent bookkeeper without the aid of a professional accountant, if the system of accounts which the bookkeeper is using is adequate. Unusual and peculiar financial transactions, however, are sometimes very difficult to record so that their exact nature will be apparent. It is necessary so to set them down that the rights of all parties con- cerned may be accurately determined from the evidence of the entries, and it is here that the routine bookkeeper sometimes fails. When he does, the accountant is later called upon to adjust or correct the incomplete or erro- neous entries — something that is often difficult and sometimes impossible.

by Abdullah Sam
I’m a teacher, researcher and writer. I write about study subjects to improve the learning of college and university students. I write top Quality study notes Mostly, Tech, Games, Education, And Solutions/Tips and Tricks. I am a person who helps students to acquire knowledge, competence or virtue.

Leave a Comment