COMMERCE 2AB3 Chapter Notes - Chapter 1: Cash Flow Statement, Income Statement, Income Tax
8 Mar 2014
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The basic objective of aaa cccccc ooouuunnn ttt iiinnn ggg is to provide (stakeholders) with useful information about a business enterprise in order to help them make rational economic decisions. Users of accounting information (stakeholders) (they cannot access the accounting records))) Internal users (they have access to the accounting records) Want to know if they should hold, buy more, or sell their shares in a particular company. Want to know if a company is a good investment. Want to know if they should extend credit to the firm, how much to extend, and for how long. Want to know if taxable income is measured properly. Feedback: balance sheet measures the financial health of the company, income statement measures the financial success of the company, cash flow statement measures the liquidity of the company. Companies must prepare the financial statements according to generally accepted set of rules, standards, principles, and concepts referred to as:
