Accounting or accountancy is the measurement and communication of financial information about economic entities such as businesses and corporations. The modern field was established by the Italian mathematician Luca Pacioli in 1494, practitioners of accounting are known as accountants. The terms accounting and financial reporting are often used as synonyms, Accounting can be divided into several fields including financial accounting, management accounting, external auditing, and tax accounting. Accounting information systems are designed to support accounting functions and related activities, Accounting is facilitated by accounting organizations such as standard-setters, accounting firms and professional bodies. Financial statements are audited by accounting firms, and are prepared in accordance with generally accepted accounting principles. GAAP is set by various standard-setting organizations such as the Financial Accounting Standards Board in the United States, as of 2012, all major economies have plans to converge towards or adopt the International Financial Reporting Standards.
The history of accounting is thousands of old and can be traced to ancient civilizations. By the time of the Emperor Augustus, the Roman government had access to detailed financial information, double-entry bookkeeping developed in medieval Europe, and accounting split into financial accounting and management accounting with the development of joint-stock companies. The first work on a double-entry bookkeeping system was published in Italy, both the words accounting and accountancy were in use in Great Britain by the mid-1800s, and are derived from the words accompting and accountantship used in the 18th century. In Middle English the verb to account had the form accounten, which was derived from the Old French word aconter, which is in turn related to the Vulgar Latin word computare, meaning to reckon. The base of computare is putare, which meant to prune, to purify, to correct an account, hence, to count or calculate. The word accountant is derived from the French word compter, which is derived from the Italian.
Accountancy refers to the occupation or profession of an accountant, particularly in British English, Accounting has several subfields or subject areas, including financial accounting, management accounting, auditing and accounting information systems. Financial accounting focuses on the reporting of a financial information to external users of the information, such as investors. It calculates and records business transactions and prepares financial statements for the users in accordance with generally accepted accounting principles. GAAP, in turn, arises from the agreement between accounting theory and practice, and change over time to meet the needs of decision-makers. This branch of accounting is studied as part of the exams for qualifying as an actuary. It is interesting to note that two professionals and actuaries, have created a culture of being archrivals
One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers. Performance management—developing the practice of business decision-making and managing the performance of the organization, risk management—contributing to frameworks and practices for identifying, measuring and reporting risks to the achievement of the objectives of the organization. The Institute of Certified Management Accountants, Management accountants therefore are seen as the value-creators amongst the accountants. They are more concerned with looking and taking decisions that will affect the future of the organization, than in the historical recording. In 2014 CIMA created the Global Management Accounting Principles, the result of research from across 20 countries in five continents, the principles aim to guide best practice in the discipline. Focus, Financial accounting focuses on the company as a whole, Management accounting provides detailed and disagregated information about products, individual activities, plants and tasks.
Traditional approaches limit themselves by defining cost behavior only in terms of production or sales volume, in 1993, the Accounting Education Change Commission Statement Number 4 calls for faculty members to expand their knowledge about the actual practice of accounting in the workplace. Variance analysis is an approach to the comparison of the actual and budgeted costs of the raw materials. Other approach that can be viewed as innovative to the U. S. is the German approach, one of the more innovative accounting practices available today is resource consumption accounting. Consistent with other roles in corporations, management accountants have a dual reporting relationship. A function of management accounting in such organizations is to work closely with the IT department to provide IT cost transparency, given the above, one view of the progression of the accounting and finance career path is that financial accounting is a stepping stone to management accounting. Consistent with the notion of creation, management accountants help drive the success of the business while strict financial accounting is more of a compliance.
Activity-based costing was first clearly defined in 1987 by Robert S. Kaplan and W. Bruns as a chapter in their book Accounting and Management, A Field Study Perspective. For example, increased automation has reduced labor, which is a direct cost, but has increased depreciation, the term Grenzplankostenrechnung, often referred to as GPK, has best been translated as either marginal planned cost accounting or flexible analytic cost planning and accounting. GPK is published in cost accounting textbooks, notably Flexible Plankostenrechnung und Deckungsbeitragsrechnung, in the mid- to late-1990s several books were written about accounting in the lean enterprise. The term lean accounting was coined during that period and these books contest that traditional accounting methods are better suited for mass production and do not support or measure good business practices in just-in-time manufacturing and services. The movement reached a point during the 2005 Lean Accounting Summit in Dearborn, Michigan. 320 individuals attended and discussed the advantages of a new approach to accounting in the lean enterprise,520 individuals attended the 2nd annual conference in 2006 and it has varied between 250 and 600 attendees since that time
A corporation is a company or group of people authorized to act as a single entity and recognized as such in law. Early incorporated entities were established by charter, most jurisdictions now allow the creation of new corporations through registration. Corporations chartered in regions where they are distinguished by whether they are allowed to be for profit or not are referred to as for profit and not-for-profit corporations, there is some overlap between stock/non-stock and for profit/not-for-profit in that not-for-profit corporations are always non-stock as well. A for profit corporation is almost always a stock corporation, registered corporations have legal personality and are owned by shareholders whose liability is limited to their investment. Shareholders do not typically actively manage a corporation, shareholders instead elect or appoint a board of directors to control the corporation in a fiduciary capacity, in American English, the word corporation is most often used to describe large business corporations.
In British English and in the Commonwealth countries, the company is more widely used to describe the same sort of entity while the word corporation encompasses all incorporated entities. In American English, the company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity. Despite not being human beings, corporations, as far as the law is concerned, are legal persons. Corporations can exercise human rights against real individuals and the state, Corporations can be dissolved either by statutory operation, order of court, or voluntary action on the part of shareholders. Corporations can even be convicted of offenses, such as fraud. However, corporations are not considered living entities in the way humans are. While not a corporation, this new type of entity became very attractive as an alternative for corporations not needing to issue stock, in Germany, the organization was referred to as Gesellschaft mit beschränkter Haftung or GmbH.
In the last quarter of the 20th Century this new form of organization became available in the United States and other countries. Since the GmbH and LLC forms of organization are technically not corporations they will not be discussed in this article, the word corporation derives from corpus, the Latin word for body, or a body of people. By the time of Justinian, Roman law recognized a range of corporate entities under the names universitas and these included the state itself and such private associations as sponsors of a religious cult, burial clubs, political groups, and guilds of craftsmen or traders. Such bodies commonly had the right to own property and make contracts, to receive gifts and legacies, to sue and be sued, private associations were granted designated privileges and liberties by the emperor. Entities which carried on business and were the subjects of rights were found in ancient Rome. In medieval Europe, churches became incorporated, as did local governments, such as the Pope, the point was that the incorporation would survive longer than the lives of any particular member, existing in perpetuity
Finance is a field that deals with the study of investments. It includes the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty, Finance can be defined as the science of money management. Finance aims to price assets based on their level and their expected rate of return. Finance can be broken into three different sub-categories, public finance, corporate finance and personal finance. g, health and property insurance and saving for retirement. Personal finance may involve paying for a loan, or debt obligations, net worth is a persons balance sheet, calculated by adding up all assets under that persons control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the sources of income within a year. From this analysis, the financial planner can determine to what degree, adequate protection, the analysis of how to protect a household from unforeseen risks. These risks can be divided into the following, property, disability, some of these risks may be self-insurable, while most will require the purchase of an insurance contract.
Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance, business owners, professionals and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance enjoys some tax benefits, utilizing insurance investment products may be a piece of the overall investment planning. Tax planning, typically the income tax is the single largest expense in a household, managing taxes is not a question of if you will pay taxes, but when and how much. Government gives many incentives in the form of tax deductions and credits, most modern governments use a progressive tax. Typically, as ones income grows, a marginal rate of tax must be paid. Understanding how to take advantage of the tax breaks when planning ones personal finances can make a significant impact in which it can save you money in the long term. Investment and accumulation goals, planning how to accumulate enough money - for large purchases, major reasons to accumulate assets include, purchasing a house or car, starting a business, paying for education expenses, and saving for retirement.
Achieving these goals requires projecting what they will cost, and when you need to withdraw funds that will be necessary to be able to achieve these goals, a major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the planner will suggest a combination of asset earmarking. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity
Development economics is a branch of economics which deals with economic aspects of the development process in low-income countries. Development economics involves the creation of theories and methods that aid in the determination of policies and practices, unlike in many other fields of economics, approaches in development economics may incorporate social and political factors to devise particular plans. Also unlike many other fields of economics, there is no consensus on what students should know, different approaches may consider the factors that contribute to economic convergence or non-convergence across households and countries. The earliest Western theory of development economics was mercantilism, which developed in the 17th century, earlier theories had given little attention to development. For example, Scholasticism the dominant school of thought during medieval feudalism, emphasized reconciliation with Christian theology and ethics, the 16th- and 17th-century School of Salamanca, credited as the earliest modern school of economics, likewise did not address development specifically.
Mercantilism held that a nations prosperity depended on its supply of capital and it emphasised the maintenance of a high positive trade balance as a means of accumulating this bullion. To achieve a trade balance, protectionist measures such as tariffs. Mercantilist development theory advocated colonialism, in France, mercantilist policy is most associated with 17th-century finance minister Jean-Baptiste Colbert, whose policies proved influential in American development. Mercantilist ideas continue in the theories of nationalism and neomercantilism. A significant difference from mercantilism was the de-emphasis on colonies, in favor of a focus on domestic production, the names most associated with 19th-century economic nationalism are the American Alexander Hamilton, the German-American Friedrich List, and the American Henry Clay. Hamiltons 1791 Report on Manufactures, his opus, is the founding text of the American System. The key authors are Paul Rosenstein-Rodan, Kurt Mandelbaum, Ragnar Nurkse, only after the war did economists turn their concerns towards Asia and Latin America.
At the heart of these studies, by such as Simon Kuznets and W. Arthur Lewis was an analysis of not only economic growth. The linear-stages-of-growth model posits that there are a series of five stages of development which all countries must go through during the process of development. Such theories have been criticized for not recognizing that, while necessary and that is to say that this early and simplistic theory failed to account for political and institutional obstacles to development. Furthermore, this theory was developed in the years of the Cold War and was largely derived from the successes of the Marshall Plan. This has led to the criticism that the theory assumes that the conditions found in developing countries are the same as those found in post-WWII Europe. There are two forms of structural-change theory, W
Labour economics seeks to understand the functioning and dynamics of the markets for wage labour. Labour markets or job markets function through the interaction of workers and employers, Labour economics looks at the suppliers of labour services and the demanders of labour services, and attempts to understand the resulting pattern of wages and income. In economics, labour is a measure of the work done by human beings and it is conventionally contrasted with such other factors of production as land and capital. There are theories which have developed a concept called human capital, there are two sides to labour economics. Labour economics can generally be seen as the application of microeconomic or macroeconomic techniques to the labour market, microeconomic techniques study the role of individuals and individual firms in the labour market. Macroeconomic techniques look at the interrelations between the market, the goods market, the money market, and the foreign trade market. It looks at how these interactions influence macro variables such as employment levels, participation rates, aggregate income, the labour force is defined as the number of people of working age, who are either employed or actively looking for work.
The participation rate is the number of people in the force divided by the size of the adult civilian noninstitutional population. The unemployment level is defined as the labour force minus the number of people currently employed, the unemployment rate is defined as the level of unemployment divided by the labour force. The employment rate is defined as the number of people currently employed divided by the adult population, in these statistics, self-employed people are counted as employed. Variables like employment level, unemployment level, labour force, and they can be contrasted with flow variables which measure a quantity over a duration of time. Changes in the force are due to flow variables such as natural population growth, net immigration, new entrants. Technological advancement often reduces frictional unemployment, for example, internet search engines have reduced the cost, structural unemployment – This reflects a mismatch between the skills and other attributes of the labour force and those demanded by employers.
The process of globalization has contributed to changes in labour markets. Natural rate of unemployment – This is the summation of frictional and structural unemployment and it is the lowest rate of unemployment that a stable economy can expect to achieve, given that some frictional and structural unemployment is inevitable. Economists do not agree on the level of the rate, with estimates ranging from 1% to 5%. The estimated rate varies from country to country and from time to time, demand deficient unemployment – In Keynesian economics, any level of unemployment beyond the natural rate is probably due to insufficient goods demand in the overall economy. During a recession, aggregate expenditure is deficient causing the underutilisation of inputs, neoclassical economists view the labour market as similar to other markets in that the forces of supply and demand jointly determine price and quantity
Commodity marks the fifth album from Remedy Drive. The project was funded via a Kickstarter funding campaign that enabled the band to release the album on September 23,2014. Remedy Drive worked with former band member Philip Zach on production, hamilton Barber, writes a four star review for Jesus Freak Hideout, Commodity is a good record. Specifying in a four and a star review at New Release Tuesday, Mary Nikkel observes, Commodity is a concept album. Jessica Morris, awarding the album a nine and a star rating for Jesus Wired, writes
A tax is a financial charge or other levy imposed upon a taxpayer by a state or the functional equivalent of a state to fund various public expenditures. A failure to pay, or evasion of or resistance to taxation, is punishable by law. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent, the legal definition and the economic definition of taxes differ in that economists do not regard many transfers to governments as taxes. For example, some transfers to the sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments, governments obtain resources by creating money and coins, through voluntary gifts, by imposing penalties, by borrowing, and by confiscating wealth. In modern taxation systems, governments levy taxes in money, but in-kind and corvée taxation are characteristic of traditional or pre-capitalist states, the method of taxation and the government expenditure of taxes raised is often highly debated in politics and economics.
Tax collection is performed by a government agency such as the Canada Revenue Agency, when taxes are not fully paid, the state may impose civil penalties or criminal penalties on the non-paying entity or individual. The levying of taxes aims to raise revenue to fund governing and/or to alter prices in order to affect demand and their functional equivalents throughout history have used money provided by taxation to carry out many functions. A governments ability to raise taxes is called its fiscal capacity, when expenditures exceed tax revenue, a government accumulates debt. A portion of taxes may be used to service past debts, governments use taxes to fund welfare and public services. These services can include education systems, pensions for the elderly, unemployment benefits, energy and waste management systems are common public utilities. A tax effectively changes relative prices of products and they have therefore sought to identify the kind of tax system that would minimize this distortion.
Governments use different kinds of taxes and vary the tax rates, taxes on the poor supported the nobility, modern social-security systems aim to support the poor, the disabled, or the retired by taxes on those who are still working. A states tax system often reflects its communal values and the values of those in current political power. To create a system of taxation, a state must make choices regarding the distribution of the tax burden—who will pay taxes and how much they will pay—and how the taxes collected will be spent. In democratic nations where the public elects those in charge of establishing or administering the tax system, in countries where the public does not have a significant amount of influence over the system of taxation, that system may reflect more closely the values of those in power. All large businesses incur administrative costs in the process of delivering revenue collected from customers to the suppliers of the goods or services being purchased. Taxation is no different, the resource collected from the public through taxation is always greater than the amount which can be used by the government, the difference is called the compliance cost and includes the labour cost and other expenses incurred in complying with tax laws and rules
Public economics is the study of government policy through the lens of economic efficiency and equity. At its most basic level, public economics provides a framework for thinking about whether or not the government should participate in economic markets and to what extent it should do so. In order to do this, microeconomic theory is utilized to assess whether the market is likely to provide efficient outcomes in the absence of governmental interference. Inherently, this involves the analysis of government taxation and expenditures. This subject encompasses a host of topics including market failures, Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve social welfare. Emphasis is on analytical and scientific methods and normative-ethical analysis, as distinguished from ideology, examples of topics covered are tax incidence, optimal taxation, and the theory of public goods. The Journal of Economic Literature classification codes are one way categorizing the range of economics subjects, Public Economics, one of 19 primary classifications, has 8 categories.
Diamond and James A. Mirrlees published a paper which showed that even when lump-sum taxation is not available. One of the achievements for which the great English economist A. C. Pigou is known, was his work on the divergences between marginal private costs and marginal social costs, in his book, The Economics of Welfare, Pigou describes how these divergences come about. It is, possible for the State, if it so chooses, the most obvious forms which these encouragements and restraints may assume are, of course, those of bounties and taxes. Alternatively, he describes negative externalities, such as the factory that destroys a great part of the amenities of neighboring sites, in 1960, the economist Ronald H. Coase proposed an alternative scheme whereby negative externalities are dealt with through the appropriate assignment of property rights. This result is known as the Coase theorem, Public goods, or collective consumption goods, exhibit two properties, non-rivalry and non-excludability. Something is non-excludable if its use cannot be limited to a group of people.
Again, since one cannot prevent people from viewing a firework display it is non-excludable, another example of public good is the service that is provided by law enforcement organizations, such as sheriffs and police. Typically and towns are served by one police department. The latter book is considered a classic in the field of operations research. In subsequent years, several important works appeared, Jack Hirshleifer, James DeHaven. Lectures in Public Economics, McGraw-Hill Auerbach, Alan J. and Martin S. Feldstein, Economics of the Welfare State, 4th ed. Oxford University Press
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a corporation or organization, which can include a non-profit organization or a government agency. A board of directors activities are determined by the powers and responsibilities conferred on it by an authority outside itself and these matters are typically detailed in regulations or in the organizations constitution and bylaws. These authorities may specify the number of members of the board, how they are to be chosen, and how often they are to meet. In an organization with voting members, the board is accountable to, and might be subordinate to, the full membership. In a stock corporation, non-executive directors are voted for by the shareholders, the board of directors appoints the chief executive officer of the corporation and sets out the overall strategic direction. In corporations with dispersed ownership, the identification and nomination of directors are often done by the board itself, in a non-stock corporation with no general voting membership, the board is the supreme governing body of the institution, its members are sometimes chosen by the board itself.
Other names include Board of directors and advisors, board of governors, board of managers, board of regents, board of trustees and it may be called the executive board and is often simply referred to as the board. For companies with publicly trading stock, these responsibilities are typically much more rigorous, the board chooses one of its members to be the chairman, who holds whatever title is specified in the bylaws or articles of association. However, in organizations, the members elect the president of the organization. The directors of an organization are the persons who are members of its board, several specific terms categorize directors by the presence or absence of their other relationships to the organization. An inside director is a director who is an employee, chief executive, major shareholder, inside directors represent the interests of the entitys stakeholders, and often have special knowledge of its inner workings, its financial or market position, and so on. Executive directors often have an area of responsibility in the organization, such as finance, human resources.
An outside director is a member of the board who is not otherwise employed by or engaged with the organization, a typical example is a director who is president of a firm in a different industry. Outside directors are not employees of the company or affiliated with it in any other way, outside directors bring outside experience and perspectives to the board. One of the arguments for having outside directors is that they can keep a eye on the inside directors. Outside directors are unlikely to tolerate insider dealing between insider directors, as outside directors do not benefit from the company or organization, outside directors are often useful in handling disputes between inside directors, or between shareholders and the board. They are thought to be advantageous because they can be objective, director - a person appointed to serve on the board of an organization, such as an institution or business. This practice results in an interlocking directorate, where a small number of individuals have significant influence over a large number of important entities
Venture capital firms or funds invest in these early-stage companies in exchange for equity–an ownership stake–in the companies they invest in. Venture capitalists take on the risk of financing risky start-ups in the hopes some of the firms they support will become successful. The start-ups are usually based on a technology or business model and they are usually from the high technology industries, such as information technology. The typical venture capital investment occurs after a seed funding round. The first round of venture capital to fund growth is called the Series A round. This institution helps identify promising new firms and provide them with finance, technical expertise, marketing know-how, and business models. Once integrated into the network, these firms are more likely to succeed. However, venture capitalists decisions are often biased, exhibiting for instance overconfidence and illusion of control, a venture may be defined as a project prospective converted into a process with an adequate assumed risk and investment.
With few exceptions, private equity in the first half of the 20th century was the domain of wealthy individuals, the Wallenbergs, Whitneys and Warburgs were notable investors in private companies in the first half of the century. In 1938, Laurance S. Rockefeller helped finance the creation of both Eastern Air Lines and Douglas Aircraft, and the Rockefeller family had vast holdings in a variety of companies. Eric M. Warburg founded E. M. Warburg & Co. in 1938, which would ultimately become Warburg Pincus, with investments in both leveraged buyouts and venture capital. The Wallenberg family started Investor AB in 1916 in Sweden and were early investors in several Swedish companies such as ABB, Atlas Copco, before World War II, money orders remained primarily the domain of wealthy individuals and families. Georges Doriot, the father of capitalism, founded INSEAD in 1957. Along with Ralph Flanders and Karl Compton, Doriot founded ARDC in 1946 to encourage investment in businesses run by soldiers returning from World War II. ARDC became the first institutional private-equity investment firm to raise capital from other than wealthy families.
ARDC is credited with the first trick when its 1957 investment of $70,000 in Digital Equipment Corporation would be valued at over $355 million after the initial public offering in 1968. Former employees of ARDC went on to several prominent venture-capital firms including Greylock Partners and Morgan, Holland Ventures. ARDC continued investing until 1971, when Doriot retired, in 1972 Doriot merged ARDC with Textron after having invested in over 150 companies