acc - 220 - Week 1 dq 1

acc - 220 - Week 1 dq 1 - alternatives, estimations of...

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Accounting is the information system that recognizes, records, and communicates the economic events of an organization to interest users. Numerous people have a concern in knowing about the ongoing activities of the company. The people are consumers of accounting information. The users are capable of being divided into two sets, which include internal users and external users. The internal users are managers who need accounting information in planning, controlling, and evaluating business operations. The internal users of accounting information are managers, which include marketing managers, production supervisors, finance directors, and company officers. In management of a business, managers should answer numerous vital questions, which includes is cash adequate to pay bills, what is the cost of manufacturing each unit of product, can we pay for employee pay raises this year, and which product line is the mainly lucrative. For internal users, accounting supply internal reports, which include a financial evaluations of operating
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Unformatted text preview: alternatives, estimations of income from new sales operations, and predict of cash requirements for the following year. In addition, a recap of financial information is on hand in the form of financial statements. There are a number of categories of external users of accounting knowledge. Investors , which also known as owners use accounting knowledge to create choices to buy, hold, or sell stock. Creditors , which include suppliers and bankers, use accounting knowledge to examine the threats of granting credit or loaning money. Several questions that might be asked by investors and creditors about a business, which include is the business making adequate income, how does the business measure up in size and prosperity with competitors, and will the business be capable to recompense its debts as they come due. The knowledge requirements and questions of other external users differ significantly....
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This note was uploaded on 12/12/2011 for the course ACC 220 220 taught by Professor Aliciahubbard during the Winter '10 term at University of Phoenix.

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