SB CH 1 Pt 1 Flashcards
1
Q
What is the primary function of financial accounting
A
Provide useful information to externa, users of the business
2
Q
Accounting provides useful information about economic activity to help
A
- Produce good decisions
- Foster a prosperous society
3
Q
Providing financial information to various external users
A
- investors
- Creditors
*Other external Users
4
Q
Investors and Creditors use different kinds of information
A
- to predict the future risk and potential return of investments or loans
- Before supplying capital to businesses
* Financial information is a key component of that information set
5
Q
Financial infromation is conveyed through financial statements and related disclosure notes
A
*Balance Sheet
* INcome statement (and the statement of comprehensive income)
*Statement of cash flows
* Statement of shareholders equity
6
Q
Financial reporting referes to
A
the process of providing financial information to external users
7
Q
A
