Most of the world’s work is done through organizations—groups of people who work together to accomplish one or more objectives. In doing its work, an organization uses resources—labor, materials, various services, buildings, and equipment. These resources need to be financed, or paid for. To work effectively, the people in an organization need information about the amounts of these resources, the means of financing them, and the results achieved through using them. Parties outside the organization need similar information to make judgments about the organization. Accounting is a system that provides such information. Organizations can be classified broadly as either for-profit or nonprofit. As these names suggest, a dominant purpose.
