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1、Chapter1AccountinginBusinessQUESTIONS1.Thepurposeofaccountingistoprovidedecisionmakerswithrelevantandreliableinformationtohelpthemmakebetterdecisions.Examplesincludeinformationforpeoplemakinginvestments,loans,andbusinessplans.2.Technologyreducesthetime,effort,andcostofrecordkeeping.Thereisstilladem
2、andforpeoplewhocandesignaccountingsystems,supervisetheiroperation,analyzecomplextransactions,andinterpretreports.Demandalsoexistsforpeoplewhocaneffectivelyusecomputerstoprepareandanalyzeaccountingreports.Technologywillneversubstituteforqualifiedpeoplewithabilitiestoprepare,use,analyze,andinterpreta
3、ccountinginformation.3.Externalusersandtheirusesofaccountinginformationinclude:(a)lenders,tomeasuretheriskandreturnofloans;(b)shareholders,toassesswhethertobuy,sell,orholdtheirshares;(c)directors,tooverseetheirinterestsintheorganization;(d)employeesandlaborunions,tojudgethefairnessofwagesandassessf
4、utureemploymentopportunities;and(e)regulators,todeterminewhethertheorganizationiscomplyingwithregulations.Otherusersarevoters,legislators,governmentofficials,contributorstononprofits,suppliersandcustomers.4.Businessownersandmanagersuseaccountinginformationtohelpanswerquestionssuchas:Whatresourcesdo
5、esanorganizationown?Whatdebtsareowed?Howmuchincomeisearned?Areexpensesreasonableforthelevelofsales?Arecustomers’accountsbeingpromptlycollected?5.Servicebusinessesinclude:StandardandPoor’s,Dun&Bradstreet,MerrillLynch,SouthwestAirlines,CitiCorp,Humana,CharlesSchwab,andPrudential.Businessesofferingpro
6、ductsincludeNike,Reebok,Gap,AppleComputer,FordMotorCo.,PhilipMorris,Coca-Cola,BestBuy,andCircuitCity.6.Theinternalroleofaccountingistoservetheorganization’sinternaloperatingfunctions.Itdoesthisbyprovidingusefulinformationforinternalusersincompletingtheirtasksmoreeffectivelyandefficiently.Byprovidin
7、gthisinformation,accountinghelpstheorganizationreachitsoverallgoals.7.Accountingprofessionalsoffermanyservicesincludingauditing,managementadvice,taxplanning,businessvaluation,andmoneymanagement.8.Marketingm