explain accounting is an art as well as science
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ANSWER :
Accounting can be considered as both an art as well as a science.
- ❍ Accounting as an Art :-
The term 'Art' refers to the application of knowledge comprising of some accepted theories, principles, rules, concept and convention. It helps to achieve the goals and tells the manner in which one may attain our objective in the best possible way. Accounting is considered as an art of recording, classifying, analyzing as well as summarising the financial transactions in a systematic and significant manner and in terms of money and interpreting the results thereof to achieve the predetermined objectives of an entity. It is based on the some rules, principles and techniques of application formulated by the subject, accountancy. it has not been possible to develop principles which have universal applicability, since accounting has to be applied in different organisations and varried situation. Accounting is based on certain concept and convention called Generally Accepted Accounting Principle (GAAP) and is subject to some limitation. Moreover, it may be influenced by personal bias and judgement of an accountant involved in accounting activities. Hence, from this point of view accounting is an art.
According to American Institute of Certified Public Accountants, "Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events, which are, in part at least, of a financial character and interpreting the result thereof."
- ❍ Accounting as a Science :-
The term 'Science' may be defined as a system and body of knowledge based on certain principles that have universal applicability and which establishes the relationship of effect and cause about any occurrence or happening. Accounting is also considered as science. It is because the functions of accounting i.e, recording, classifying, summarising and interpretation of business transaction in terms of money is a done on the basis of certain principles. The most commonly used principle in accounting is the principle of double entry system and it has universal applicability. Moreover, accounting is based on certain concept and convention called Generally Accepted Accounting Principle though it has some limitations. Hence, this point of view, accounting is a science. However, a basic feature of pure science is the study of relationship between cause and effect of an occurrence. But in accounting the relationship between the cause and effect is not studied. Therefore, though is considered as a science, it is not a pure science.
According to Smith and Ashburne, "Accounting is the science of recording and classifying business transactions and events, primarily of a financial character and the art of making significant summaries, analysis and interpretations of these transactions and events and communicating results to persons who must take decisions or form judgement.”