Financial Statements: A Business Means of Communication
Chapter I task and its Background
The American Accounting Association in its Statement of elementary Accounting Theory defines Accounting as a procedure of identifying, measuring and communicating economic information to permit communicate judgment and decision by employrs of the information.
Although account is vital to unmatcheds daily activities, it has made its impact in the force field of business, from the small bakery in the alley corner to a multi-national corporation in Ayala or Makati Avenue. The baker in the street corner has a problem of what bread to bake, how much materials to barter for and what prices will the bread and pastries be sold. If San Miguel Corporation, in answer to globalization, plans to draw out operation and put up branches abroad, it must make decisions regarding where to implant its branches, how much capital to invest, and what products to produce and at what prices will these be sold. Again, decisions regarding these matters require an understanding of bill information.
All businesses, from a primary one to the most complicated one, have one function in common: they need financial information beforehand making decisions.
Therefore knowledge of the accounting language and how to use it is very important. Accounting plays a vital role in business by keeping track of its activities and resources and by coverage back its financial position and results of operations. In other words, an comptrollers task is to supply financial information to story users so that they could make informed judgment and better decision.
The accounting information were gathered and summarized into financial statements. Financial statements are the message by which the information accumulated and processed in financial accounting is periodically communicated to the users. Stated differently, the financial statements are the end up product or main output of the financial accounting process....If you want to get a full essay, order it on our website: Orderessay
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