ABSTRACT
Accounting systems attempt to measure business performance. Accounting has its origins in bookkeeping: the recording of economic transactions which arise from transfers of cash or agreements to transfer cash. Accountants treat fixed assets as economic resources arising from past transactions, which will benefit more than one accounting period. Many companies’ accounting systems yield figures for the cost of particular products that are based upon inventory valuations. Many modern organizations are organized into profit and cost centres, a structure enabled and reinforced by accounting measurement. Capital budgeting techniques involve some attempt to quantify the costs and benefits of proposed investments as an aid to decision making. Traditional accounting models are poorly equipped to deal with intangible assets, which have become increasingly important in business. Accounting enables a mode of organization that may prove to be counterproductive.
