Accounting: Difference between revisions
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Modern day capital accounting in the [[United States]] is under the standard Generally Accepted Accounting Principles (GAAP). The Securities and Exchange Commission ([[SEC]]) has proposed a movement to international financial reporting standards or [[IFRS]]. | Modern day capital accounting in the [[United States]] is under the standard Generally Accepted Accounting Principles (GAAP). The Securities and Exchange Commission ([[SEC]]) has proposed a movement to international financial reporting standards or [[IFRS]]. | ||
[[Economic calculation]] directs the actions of individual business persons. "Economic logic prevails over the technological," says Schumpeter.<ref name="schumpeter_economic_logic">[[Joseph Schumpeter]], ''The Theory of Economic Development'', trans. Redvers Opie (Cambridge, Massachusetts: Harvard University Press, 1961) 14</ref> The transition to a world standard of accounting may impart some benefits, for example: "...in more efficient functioning of [[capital markets]] and a lower [[cost of capital]] for the economy as a whole." <ref name="SFAC_8">Statement of Financial Accounting Concepts, No. 8 [http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175821997186&blobheader=application/pdf] QC37</ref> In sum, | [[Economic calculation]] directs the actions of individual business persons. "Economic logic prevails over the technological," says Schumpeter.<ref name="schumpeter_economic_logic">[[Joseph Schumpeter]], ''The Theory of Economic Development'', trans. Redvers Opie (Cambridge, Massachusetts: Harvard University Press, 1961) 14</ref> The transition to a world standard of accounting may impart some benefits, for example: "...in more efficient functioning of [[capital markets]] and a lower [[cost of capital]] for the economy as a whole." <ref name="SFAC_8">Statement of Financial Accounting Concepts, No. 8 [http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175821997186&blobheader=application/pdf] QC37</ref> In sum, the method of economic calculation has importance in economic analysis. | ||
Revision as of 19:09, 6 February 2011
Accounting is the method by which an organization measures the use of assets and liabilities against money. It is an indispensable tool and prerequisite to modern day capitalism.[1] Double book entry accounting is a method by which every economic action must affect two accounts so that they balance in the equation: Assets - Liabilities = Equity.
Recent Developments
Modern day capital accounting in the United States is under the standard Generally Accepted Accounting Principles (GAAP). The Securities and Exchange Commission (SEC) has proposed a movement to international financial reporting standards or IFRS.
Economic calculation directs the actions of individual business persons. "Economic logic prevails over the technological," says Schumpeter.[2] The transition to a world standard of accounting may impart some benefits, for example: "...in more efficient functioning of capital markets and a lower cost of capital for the economy as a whole." [3] In sum, the method of economic calculation has importance in economic analysis.
References
- ↑ Max Weber, General Economic History, trans. Frank H. Knight (New York, NY: Collier Books, 1961) 208-209
- ↑ Joseph Schumpeter, The Theory of Economic Development, trans. Redvers Opie (Cambridge, Massachusetts: Harvard University Press, 1961) 14
- ↑ Statement of Financial Accounting Concepts, No. 8 [1] QC37