So that the data must be reliable and accurate and must understand by the users of information. •Decision makers need information. The more important the decision is, the greater is the need for reliable information. Business records also help all businesses and most individuals to keep accounting record to help them aid for their decision making.
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What is Accounting and its purpose? read more on:
What is the primary purpose of the accounting close process?The users of information and their information needs are as follows:
1.Investors- It helps them determine whether they should buy or sell.
2.Employees- They are interested in information about stability and profitability of their employers. They are also interested in information which enables them to access the ability of the enterprise to provide remuneration, retirement benefits and employment opportunities.
3.Lenders- They want to determine whether their loans and the related interest will paid when due.
4.Suppliers and Other trade creditors- They need information that enables them to determine whether amounts owing to them will be paid when due.
5.Customers- They need information about the continuance of the enterprise especially when they have long-term involvement with, or are dependent on, the enterprise.
6.Government and their agencies- are interested in the allocation of resources and therefore the activities of the enterprise. To regulate the activities of the enterprise and to determine the taxation policies ad as the basis for national income and similar statistics.
7.Public- The substantial contribution to local economy of the enterprise including the number of people they employ and their patronage of local supplier.
In accounting, assets are the resources that a company owns and has monetary value.Two types of asset:Current asset - assets that are usable or convertible to cash within a year or operating cycle of a business.Non-current asset - assets that can't be used or converted to cash within a year or operating cycle of a business.Examples of current asset:Cash and cash -on- of non-current asset:Land and buildingEquipment/MachinesIntangible assets
When the population rises the economic developement decreases. As the population rises the needs and wants of the people also rises since the needs and wants are rising, the gorvenment will rise the taxes leading to a very slow economic developement...