ARBUS101 Chapter 16: Understanding Accounting and Financial Statements
7 Nov 2016
School
Department
Course
Professor
Document Summary
Accounting: the recording, classifying, summarizing, and interpreting of financial events and transactions in an organization to provide management and other interested parties the financial information they need to make good decisions about its operation. Financial transactions include buying and selling goods and services, acquiring insurance, paying employees, and using supplies. After being recorded, they are classified into groups with common characteristics i. e. sales with sales, purchases with purchases. Internal stakeholders: marketing staff, operations staff, human resources and management staff. Marketing staff - how to set appropriate prices. Operations - costs involved in production, cost of materials and labour, make decisions as necessary. Hr - manage costs of the people, salaries are costly (e. g. service industries), see future changes of the environment (business environment, the factors affecting business) Investors - look for opportunities to increase wealth, see if profit is being made. Creditors - someone company owes money to, or lenders like banks.
