Management and Organizational Studies 1023A/B Chapter Notes - Chapter 1: Financial Statement, Legal Personality, Cash Flow Statement
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MOS 1023A/B Full Course Notes
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Chapter 1 purpose and use of financial statements. The purpose of accounting is to provide useful information for decision- making. There are two types of user groups who use accounting information: to plan, organize, and run operations. information to help decide whether to buy, hold, and sell shares. Creditors use accounting information to evaluate the risk of granting credit or loaning money to a business: internal users work for the business and need accounting information, external users include investors and creditors. Investors use accounting: proprietorships business owned by one person, partnerships business owned by two or more people, corporations a separate legal entity whose shares provide evidence of. There are three types of organizations that use accounting information: Financing activities include borrowing cash from lenders by issuing debt, or conversely, using cash to repay debt. Cash can also be raised from shareholders by issuing shares, or paid to shareholders by distributing dividends.