Chapter 1, Problem 1Q

To determine

Accounting:

Accounting is the systematic process of identifying, recording, and communicating financial information. Accounting is useful in obtaining important information about a business, such as profit or loss of a business during a particular period, and the financial worth of its assets, liabilities, and owners’ equity. Accounting provides information related to the resources of a firm, the means used to finance the resources, and the outcomes of the use of the resources.

Whether accounting is ingrained in our society and vital to our economic system.

Answer to Problem 1Q

Yes, accounting is ingrained in our society and vital to our economic system.

Explanation of Solution

The system of accounting is undoubtedly deep-rooted in our society and is vital to our economic system. Accounting is helpful in measuring the performance of a business. For instance, if the expenses in a business are consistently more than its revenues, then it would not be a wise decision for the business to continue its operations.

Accounting is also an important tool that helps investors in assessing the financial health of a business, before paying money to become shareholders of the business. Every business involves three basic activities, identifying, recording, and communicating. Accounting is vital to every business, as it helps to keep track of these activities. Accounting further helps the management of a business in making profitable business decisions and also helps in detecting and evading unethical motives.

Conclusion

Hence, it is agreeable that accounting is ingrained in our society and is vital to our economic system.