Accounting is about communication. It is an economic information system and can be thought of as the language of business. Accounting standards are as much a product of political action as they are of careful logic or empirical findings. Accounting principles cannot be discovered; they are created, developed, or decreed and are supported or justified by intuition, authority, and acceptability. This is important to note, as accounting rules may or may not have any inherent logic to them. We have alternatives in our accounting choices; the decisions are political and trade-offs will be made. However, if a user of accounting information understands the economic consequences of each choice, she can base her own accounting choices ...
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