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Week 1 DQ 1 - be able to properly allocate the funds to the...

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In your own words, how would you describe financial accounting? Select two users, one internal and one external, who you think benefit the most from accounting. Explain why and how you think they benefit. Financial accounting is the practice of indentifying and recording specific economic events. Then classifying, summarizing, and communicating this information to a specific set of users. These users then must analyze and interpret the information in order to determine how they must proceed. An example of an internal user that would benefit greatly from accounting would be the finance directors. Since the finance directors are the people primarily in charge of the money, they need to know and understand trends in the market. If they do not have this information, they will not
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Unformatted text preview: be able to properly allocate the funds to the purchasing, manufacturing, research or sales departments. An example of an external user that would benefit greatly from accounting would be creditors. These creditors could be either suppliers or banks or it could be both. Either way, they need to know and understand the financial viability of the company in order to properly gauge their creditworthiness. If the company's financial outlook is good, the creditors are more willing to loan capital or allow for product to be paid for after it is shipped. If the financial picture is bleak, then banks will require collateral or refuse to loan money. Suppliers will demand money upfront before shipping supplies....
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