Nature & Scope

of
Accounts in
everyday life
 Introduction
Everyday we, generally,
exchange money and
goods in our private and
family life and also in
institutions. These acts of
giving and taking result in
monetary changes to
respective parties in every
 Meaning of accounting
• DEFINITION:-
American Accounting
Association defines,”
Accounting refers to the
process of identifying,
measuring and
communicating economic
information to permit
informed judgments and
decisions by users of the
 History of Accounting

• At the stone age period the people

used to keep record of their preyed
beasts and collected fruits and
roots by drawing lines on the
stones inside the cave, snatching on
the bark of trees or making knots
with the help of creepers.
• When they began living in the
society, they started to keep record of
their produced crop by marking off
on the wall of their houses and
making knots with the help of the
ropes.
• After the introduction of money as a
medium of exchange, the monetary
activities of man further expanded.
Professional merchant class emerged
and trading started. With this writing
accounts of all total purchase, sales,
assets and liabilities started.
• Modern accounting (15th century)
 Scope of Accounting

• Scope is very wide

• Needed not only by business class
but also by non-business class.
• Financial activities of professionals
including doctors, engineers and
lawyers.
OBJECTS OF
ACCOUNTING
• Proper recording of transactions
• Determination of results
• Ascertain of financial position
• Supplying of financial information
• Defalcation prevented
Accounting
principles
• Entity concept
• Accrual concept
• Going concern concept
• Revenue concept
• Realization concept
Necessity and importance of
accounting
• Institutional necessity
• In day-to-day life