Business Administration 2257 Chapter Notes - Chapter 1: Retained Earnings, Income Statement, International Financial Reporting Standards
13 Sep 2017
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Document Summary
Chapter 1 - the purpose and use of financial statements. Accounting: is the information system that identifies and records the economic events of an organization, and communicates them to a wide variety of interested users. Internal users: use accounting information to plan, organize, and run companies - they work for the company. Is there enough money to pay the bills (finance) What price should we sell ipads to maximize profits? (marketing) How many employees can we afford to hire this year? (human resources) Which product line is the most profitable? (production) Finance directors, marketing managers, human resource personnel, production supervisors, and company officers. External users: several types of external users of accounting information. Should i purchase shares of this company? (investors) Will the company be able to pay its debts as they come due? (lenders and other creditors) Investors, lenders, other creditors are primary users of accounting information. Individuals in business are ethical - actions are both legal and responsible.
