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Unformatted text preview: 8/27/09 What is accounting? Purpose of accounting is to identify, record, and communicate the economic events of an organization to interested users. Accounting is communication science. Identification = elect economic events (transaction) Recording = record, classify, and summaries Communication = prepare accounting reports The accountg process includes the bookkeeping function. Analyze and interpret for users. Who Uses Accounting Data? Internal Management Human Resources Finance Marketing External IRS Investors Labor Unions Creditors SEC (Securities and Exchange) Customers 9/3/09 Commonly Asked Questions User 1. Can we afford to give our employees a pay raise? -&gt; Human Resources 2. Did the company earn a satisfactory income? -&gt; Investors 3. Do we need to borrow in the near future? -&gt; Management 4. Is cash sufficient to pay dividends to the stockholders? -&gt; Finance 5. What price for our product will maximize net income? -&gt; Marketing 6. Will the company be able to pay its short-term debts? 6....
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