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Unformatted text preview: : those responsible for operating the business, meeting profitability and liquidity
• Direct financial interest: Depend on accounting information to report on how the business has
performed, as an indicator of how it will do in the future. (Investors and Creditors)
• Indirect financial interest: Depend on accounting information to help make decisions on public
issues (tax authorities, regulatory agencies, financial advisors, lawyers, customers, suppliers, etc)
• Business transactions: economic events that directly affect the financial position of a business
• Recorded in accordance with GAAP (Generally Accepted Accounting Principles)
• All transactions recorded in terms of money (monetary unit principle)
Business is a separate entity that is distinct and separate from its owners, creditors and
customers (economic entity concept)
Processing Accounting Information:
The accounting equation: Assets = Liabilities + Owner's Eq...
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