Many people think of accounting as simply a highly technical field practiced only by professional accountants. In reality, everyone uses accounting information daily.
Accounting information is simply the means by which we measure and communicate economic events. Whether you manage a business, make investments, or monitor how you receive and use your money, you are working with accounting concepts and accounting information.Our primary goal of this blog posting about accounting is to develop your ability to understand and use accounting information in making economic decisions. To do this you will develop an understanding of the following:
- The nature of economic activities that accounting information describes.
- The assumptions and measurement techniques involved in developing accounting information.
- The information that is most relevant for making various types of decisions.
The diagram in the previous article Accounting Information illustrates how economic activities flow into the accounting process, which produces accounting information, which is used by decision makers in making economic decisions and taking specific actions, which result in economic activities, and so on.