Conceptual and Practical Approaches for Assessment in Accounting Thesis

Conceptual and Practical Approaches for Assessment in Accounting - Thesis Example This essay declares that any business ventures prefer taking moderate risks. You find that before they commit their resources in any form of a business, they first assess the risks which might accrue when running their business and their ability to try and manage those risks, the benefits that they will realize after they have invested and the challenges they might come upon when running their business. Accounting information helps in solving this problem. This study will help to know how these elements of accounting also known as the flow of funds models are very vital in understanding the determinants of the economic growth and its likelihood of entering the debt driven recession. Flow of funds models and their underpinning are among the non-neo classical economic framework. This paper makes a conclusion that the finance, insurance and the real estate (FIRE) sector includes all sorts of wealth managing nonbanks firms which may include which generate credit flows. Liquidity from the FIRE sector flows to firms, households and the government as they borrow. This then facilitates fixed capital investment, production, consumption the value by which the accounting necessity can be jointly equal to the real sector incomes which are inform of profits, taxes, wages plus the financial investments and obligations (interest payments). Funds then originate in the banking parts of the FIRE sector they do circulate to the real economy or even they can return back to the FIRE sector inform of financial investments or even in the payment of debts services plus financial fees.