BUSI 2150U Chapter Notes - Chapter 1: Accounting, Spreadsheet, Legal Personality
Document Summary
Accounting: a system for producing information about an entity and communicating that information to people who want or need the information for making decisions. Cost/benefit tradeoff: the concept of comparing the benefits of an action with the costs of the action, and taking action only if the benefits exceed the costs. Gather data process and organize data communicate information. Characteristics: accounting isn"t a science, accounting isn"t precise or exact, accounting doesn"t provide the right answer as there can be more than one reasonable answer for many accounting situation, accounting is flexible, accounting requires judgement. Entity: an economic unit of some kind, such as a business, university, government, or even a person. Economic consequences: affect"s peoples wealth and it can have an impact on the decisions they make. Accounting can occur in different ways through knowledge of accounting to make business" profit. Government profits to be low to lower taxes.
