SO4

Question 1

What is the concept of accounting?

Answer 1

-Accounting information refers to the systematic recording, reporting, and analysis of financial transactions related to a business.
-It provides a clear picture of the organizations financial health

Question 2

Importance of accounting information
Facilitating decision making

Answer 2

It provides managers/stakeholders with financial insights necessary for making decisions.

Question 3

Budgeting and Planning

Answer 3

Accounting data helps in the creation of budgets, allowing businesses to plan for future financial needs

Question 4

Compliance and reporting

Answer 4

Accurate accounting information is necessary to comply with regulatory requirements

Question 5

Users of accounting information
Internal users

Answer 5

Internal users are individuals within the organization who rely on accounting information to manage day to day operations
e.g. managers, employees, owners, shareholders

Question 6

External users

Answer 6

External users are individuals or entities outside of the business who uses accounting information to evaluate the company’s financial stability
e.g. investors, creditors, suppliers, community, government, customers