Accounting is both an art as well as Science.
(i) Art:
1. Art is the technique of achieving some pre-determined objectives.
2. And accounting is also an art of recording, classifying and summarising financial transactions
(ii) Science:
1. Science is an organised knowledge based on certain basic principles.
2. Therefore, Accounting is also a Science as it is an organised knowledge based on certain principles.

Accounting records only those transactions and events which can be expressed in terms of money such as sale of purchase of goods, salary paid etc.
(ii) Non-monetary transactions i.e. those transactions which cannot be expressed in terms of money are not recorded in the books of accounts.
(iii) Example of such transactions are value of human resources, appointment of a new managing director, etc.
(iv) These transactions may be important for the business but these are not recorded in the books of accounts. Because these cannot be measured in monetary terms.

(i) Accounting process starts with identifying financial transactions, involves recording, classifying, and summarising and ends with interpreting accounting information to various concerned parties.
(ii) Accounting process can be explained with the help of the diagram given below.

Following are the objectives of accounting:
(i) To keep a systematic record of financial transactions and events
(ii) To ascertain the profit or loss of the business enterprise
(iii) To ascertain the financial position or status of the enterprise
(iv) To provide information to various stakeholders for their requirements
(v) To protect the properties of an enterprise and
(vi) To ascertain the solvency and liquidity position of an enterprise

The internal users comprise of owners, management and employees who are within the organisation.
(i) Owners:
1. The owners of a business furnish capital to be used for the purpose of business.
2. They are interested to know whether the business has earned a profit or loss during a particular period and also its financial position on a particular date.
(ii) Management:
1. Accounting data are the basis for most of the decisions made by the management.
2. The trends in sales and purchases, relationship of expenses to the turnover, productivity of workers, comparative profitability of different products and divisions etc.
(iii) Employees:
1. The employees are interested in the profit earing capacity of the business which will affect their salary, bonus, incentives and working conditions.
2. Labour unions use the accounting data in their bargaining strategies with the management.