COMM-1107EL Chapter Notes - Chapter 1: Market Liquidity, Retained Earnings, Share Capital
14 Mar 2017
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Financial statements are the reports that companies use to convey the financial results of their business activities to various user groups. Explain why accounting is the language of business. Accounting is an information system that measures and records business activities, processes data into reports, and reports results to decision makers (the language of business) Accounting requires an understanding of the principles used to accurately report financial information and the professional judgement needed to apply them and then interpret the results. Investors and creditors provide the money to finance a business"s activities. Investors want to know how much income they can expect on their investment. Creditors want to know if and how a business is going to pay them back. Federal government requires businesses and individuals to pay income and sales taxes, so the cra uses accounting information to ensure that these organizations pay the correct amount of taxes.
