A statement about activities over a specified period. Accountability is the obligation to produce such a statement: the directors of companies are accountable to their shareholders, and in the UK ministers are accountable to Parliament for the activities of their departments. Accounts take various forms 1. A statement of the relations between two parties: a bank account records the deposits, borrowing, and withdrawals of a customer. Firms keep accounts of goods and services provided to customers: goods provided on account are supplied on credit, and an account rendered is a demand for payment for goods and services supplied. 2. A systematic summary in money terms of the activities of a business over a specified period, usually a year. The two main statements in such Accounts are the profit-and-loss account and the balance sheet. A profit-and-loss account shows receipts and payments, and the profit or loss made during an accounting period. A balance sheet lists the assets and liabilities of a firm on specified dates, at the start and the end of an accounting period. Accountants are producers and auditors of accounts: they are often required to be professionally qualified, where the accounts have to be credible to creditors, law courts, and the tax authorities. Firms’ accounts have to be certified as accurate by professional auditors. 3. National income and expenditure accounts are surveys of the economic activities of a nation. They include analysis of the production of goods and services, the distribution of incomes, and the expenditures of investors. Consumers, and the government. In the parts of national income accounts related to transactions with the rest of the world, the current account records sales and purchases of goods and services, property incomes and transfers, and the capital account records sales and purchases of assets, including both real foreign direct investment, inwards and outwards, and financial transactions, sales and purchases of securities abroad, and the making and repayment of international loans.
Reference: Oxford Press Dictonary of Economics, 5th edt.
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