[ACCT-GB 3150] - Midterm Exam Guide - Comprehensive Notes for the exam (21 pages long!)
5 Oct 2016
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As financial accounting is made for a lot of people on the outside, there are many rules and regulations that must be followed. Outside people: shareholders, stockholders, and investors main users of financial accounting information. Creditors make money on loans by charging interest. Creditors and investors are more willing to lend money/invest if they expect the company to do well in the future based on the company"s financial statements. Managers (internal decision makers) need info about the company"s business to manage the operating, investing and financing activities of the firm. Stockholders and creditors (external decision makers) need information about the same business activities to assess whether or not the company will be able to pay back its debts with interest and pay dividends. All businesses must have an accounting system that collects and processes financial information about an organization"s business activities and reports it to the decision makers.
