MGMT 20000 Chapter Notes - Chapter 1: Financial Accounting, Financial Statement, Cash Flow Statement
30 Jun 2016
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Part a accounting as a measurement/communication process. Learning objective 1 describe the two primary functions of financial accounting. Creditors: decide whether to lend money, make decisions related to lending money to a company, concerned with the company"s ability to repay its debt and interest. Customers: decide whether to purchase the product. Suppliers: decide the ability to pay for supplies. Competitors: decide market share and profitability. Tax authorities: decide on taxation policies. Local communities: decide on environmental issues. Primary functions: to measure the business activities of a company, communicate those measurements to others so that they can make informed decisions. Deals with the methods accountants use to provide information to an organization"s internal users, its own managers: financial accounting. Seeks to measure business activities of a company and to communicate those measurements to external parties for decision-making purposes. Corporation: an entity that is legally separate from its owners, pros.
