ACC100 Study Guide - Final Guide: Gross Profit, Market Liquidity, Corporate Crime
Document Summary
Users and uses of financial information: accounting is the information system that identifies, records and communicates the economic events of an organization to various stakeholders. Internal users: managers who plan, organize and run a business (cid:1) accounting provides reports allowing decisions to be made: external users: investors and creditors. Investors use accounting to make decisions to buy, hold or sell shares. Creditors need accounting to evaluate the risks of lending money. Return on this investment is referred to as dividends. Involves the purchase of those resources an entity needs in order to operate: many of an entities assets are purchased through investing activities. Qualitative characteristics: relevance: information must be relevant enough to influence a decision, reliability: without undue error, faithful representation, unbiased, comparability: with different companies, with different years of the same company, understandability: able to be understood by proficient users.
