What is Accounting, 22 '11 Subject: Accounting, Viewed by: 57
Most commercial activity occurs because business people see an opportunity to make a profit, that is , to increase their wealth. Given the nature of the free-market economy, with generally free entry and exit into markets, those ventures which yield high returns are likely to attract new entraints into the industry,thus pushing profits back down to lower levels. Entrepreneurs who find themselves in ventures which are giving low returns will tend to get out of the industry, leaving the o\\more efficient to remain.Given the ever-changing state of the world economy, changes in technology, and a host of other factors, it is clear that business is in an ever-changing state of flux. It is , therefore, not surprising that those who run businesses require information to help them navigate thkeir way through the uncertain environment. In thsi section, we consider the kind of decisions that business people must make and the way in which accounting information can help them.