Every individual performs some kind of economic activity. A salaried person gets salary and spends to buy provisions and clothing, for children’s education, construction of house, etc. A sports club formed by a group of individuals, a business run by an individual or a group of individuals, a local authority like Calcutta Municipal Corporation, Delhi Development Authority, Governments, either Central or State, all are carrying some kind of economic activities.
EA = Individual / Social Benefits
Not necessarily all the economic activities are run for any individual benefit; such economic activities may create social benefit i.e. benefit for the public, at large.
EA = Transactions & Events
Anyway such economic activities are performed through ‘transactions and events’. Transaction is used to mean ‘a business, performance of an act, an agreement’ while event is used to mean ‘a happening, as a consequence of transaction(s), a result.’
An individual invests `2,00,000 for running a stationery business. On 1st January, he purchases goods for ` 1,15,000 and sells for ` 1,47,000 during the month of January. He pays shop rent for the month ` 5,000 and finds that still he has goods worth ` 15,000 in hand. The individual performs an economic activity. He carries on a few transactions and encounters with some events. Is it not logical that he will want to know the result of his activity?