Accounting activities include identifying, measuring, reporting and analyzing economic events and transactions. They also involve interpreting information, and designing information systems to provide useful reports that monitor and control an organization's activities.
Rules increase the usefulness, reliability and comparability of accounting reports.
There are three forms of business organizations and each form has implications to legal liability, taxation, continuity, number of owners, and legal status. Sole Proprietorship-owned by one person who is subject to unlimited liability. The business is not subject to an income tax but the owner is responsible for personal income tax on the net income of the entity. Partnership-owned by two or more people, called partners, who are subject to unlimited liability. The business is not subject to an income tax but the owners are responsible for personal income tax on the net income of the entity.