Scope of Financial Accounting

What are the major scopes of financial accounting?

Scope means all those areas or sectors where financial accounting is being used in various purposes. Following are the major scope of financial accounting:

Business organization

Financial accounting is widely applicable in the business sector. In the modern world, many peoples are engaged in business sector. They keep accounting of their business. They follow Generally Accepted Accounting Principle (GAAP) to keep accounting. Properly recorded accounting helps to find out profit, loss and financial position of business firm.

Government organizations

Government organizations do not follow Generally Accepted Accounting Principle (GAAP). The government authority use government accounting to keep systematic records of all transactions in order to find the position of public fund.

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Non-government organizations

Non-government and service organizations such as NGOS, INGOs, Red Cross Society, SOS etc plays a vital role in the development of nation. They also use accounting. The accounting system used in these organizations is called fund accounting (non-trading accounting).

Individuals

Individuals also involve in different economic activities to earn their livelihood.

They also use accounting system.

The use receipts and payments account and statement of affairs etc according to their need.

Keep in Mind (KIM)

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