Chapter1StudyObjectives

Chapter1StudyObjectives - 1 Explain what accounting is....

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1   Explain what accounting is. Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users. 2   Identify the users and uses of accounting. The major users and uses of accounting are as follows: (a) Management uses accounting information in planning, controlling, and evaluating business operations. (b) Investors (owners) decide whether to buy, hold, or sell their financial interests on the basis of accounting data. (c) Creditors (suppliers and bankers) evaluate the risks of granting credit or lending money on the basis of accounting information. Other groups that use accounting information are taxing authorities, regulatory agencies, customers, labor unions, and economic planners. 3   Understand why ethics is a fundamental business concept. Ethics are the standards of conduct by which actions are judged as right or wrong. If you cannot depend on the honesty of the individuals you deal with, effective communication and economic activity would be impossible, and information would have no
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Chapter1StudyObjectives - 1 Explain what accounting is....

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