The Two Faces of Accounting.

Abstract Accounting deals with the transactions and events involving a specific economic entity. This economic entity is of concern, in different ways, to its management, its stockholders, its long and short-term creditors, its employees, and various regulatory and taxing bodies. All except the regulatory and taxing bodies are more concerned with the future of the entity than with its past. The past is important as it affects specific obligations, but is primarily important as it foreshadows the future. An economic entity is basically an economic relationship among persons. Accounting, in turn, "is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof. "Accounting must obviously be done from the viewpoint of the economic entity involved in the transactions. It must deal with the transactions, or with the events involving the economic entity.