ABOUT ACCOUNTING

Accountancy, or accounting, is the process of communicating financial information about a business entity to users such as shareholders andmanagers.^[1] The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user and is reliable.^[2] The principles of accountancy are applied to business entities in three divisions of practical art, named accounting, bookkeeping, and auditing.^[3]

The American Institute of Certified Public Accountants (AICPA) defines accountancy as "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 financial character, and interpreting the results thereof."^[4]

Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found in Mesopotamia(Assyrians). The people of that time relied on primitive accounting methods to record the growth of crops and herds. Accounting evolved, improving over the years and advancing as business advanced.^[5]

Early accounts served mainly to assist the memory of the businessperson and the audience for the account was the proprietor or record keeper alone. Cruder forms of accounting were inadequate for the problems created by a business entity involving multiple investors, so double-entry bookkeepingfirst emerged in northern Italy in the 14th century, where trading ventures began to require more capital than a single individual was able to invest. The development of joint stock companies created wider audiences for accounts, as investors without firsthand knowledge of their operations relied on accounts to provide the requisite information.^[6] This development resulted in a split of accounting systems for internal (i.e. management accounting) and external (i.e. financial accounting) purposes, and subsequently also in accounting and disclosure regulations and a growing need for independent attestation of external accounts by auditors.^[7]

Today, accounting is called "the language of business" because it is the vehicle for reporting financial information about a business entity to many different groups of people. Accounting that concentrates on reporting to people inside the business entity is called management accounting and is used to provide information to employees, managers, owner-managers and auditors. Management accounting is concerned primarily with providing a basis for making management or operating decisions. Accounting that provides information to people outside the business entity is called financial accounting and provides information to present and potential shareholders, creditors such as banks or vendors, financial analysts, economists, andgovernment agencies. Because these users have different needs, the presentation of financial accounts is very structured and subject to many more rules than management accounting. The body of rules that governs financial accounting in a given jurisdiction is called Generally Accepted Accounting Principles, or GAAP. Other rules include International Financial Reporting Standards, or IFRS,^[8] or US GAAP.

GDP sometimes tells us the wrong thing

The earthquake,tsunami and subsequent Fukushima nuclear power station problem that hit Japan just over a year ago is a case in point, which I raised at the time. The destruction of the event was not recorded by GDP statistics but any reconstruction efforts will be. So Japan as a nation is worse off but GDP numbers will show an improvement over time.

Another example is the problem of issues such as crime. An increase in crime will make everyone worse off but a response involving more police will increase GDP. If we move onto consider the legal profession we have a deeper problem. What do they produce? As we struggle to cope with that we realise that we are in an era where their significance has increased but also at a time where many would argue that their influence is often far from beneficial. Their influence on our political class may well be an example of institutional capture.

Resource use is another problem. If we look at the UK we have used up a lot of the gain from the natural resource that was/is North Sea Oil. This will have boosted UK GDP over time but there is no deduction anywhere for using up a finite resource. If we think of say deforestation it is easy to argue that economic activity here boosts GDP but is usually a bad move. Another example of this was the (in)famous Exxon Valdez oil spill in Alaska where the highly expensive clean-up effort provided a boost to US GDP because there is no measure used for damage to the environment.

CONSUMERS

i.          Explanation About Consumer:

Consumer means a person or a group of people who get goods and services from the market for personal use. Basically, consumer and the concept consumerism in the context of the micro that is from ourself. We individually is a consumer no matter what are our position in society. A big part of what we use is from the efforts of others either in the form of goods or services. No doubt that we are the consumers even though we produce goods or services itself or we pay to enjoy.

As consumer, who had to pay with amount of money or with specific rate and we expect that the benefits that we get from the transaction is the maximum benefit. We also think that as consumer, need to be treat like a king because the consumer is entitled to determine whether to buy a product or service or not. Other than that, consumers have their own rights such as right to get safety, right to get information, right to choose, right of expression, the right to compensation and other.