| Accounting can be used by anyone. A family uses a simplified version of accounting each month to balance its budget. Most families try to match the amount they have earned with the cost of their purchases. If a family's monthly earnings are $1,500, that amount must cover the purchase of items the family needs. If the cost of rent, food, recreation, and other purchases exceeds the amount of income, the family account will be out of balance, causing a problem. Accounting helps to identify problems (and successes) and acts as a guide for planning the future. |
| Accounting is a basic need for every business, and the term business has been broadened to mean any operation that deals with money. That includes families and corporations, and also schools, theaters, art galleries, charitable organizations, and even some private persons. Today many sports figures and entertainment personalities are businesses themselves. Many require full-time accountants to keep track of their income and expenses. Accountants compile statistical data about these stars' finances, and the data influence their business decisions. |
| Information provided by accountants helps company owners and managers plan for the future. For example, the data can tell executives which products are doing well and which poorly. An executive of a soup company may wish to know which soup, Frog Leg Delight or Ox Tail Stew, is selling better. By analyzing data gathered by accountants, the soup company's executive can find the answer. If Ox Tail Stew is outselling Frog Leg Delight by four to one, the executive can decide whether the soup company should stop producing Frog Leg Delight, change the recipe, or sell it at another location. By using the accountants' data, the executive can make decisions that will strengthen the company in the future. Accounting provides information that can help managers and executives make informed decisions |
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