(a) Objectives of Financial Accounting…

Question 1 Report

(a) Objectives of Financial Accounting

(b)Characteristics of good accounting information

Answer

Answer Details

(a) Objectives of Financial Accounting

To keep a complete and systematic record of all business transactions.
To ascertain the profit or loss of the business for a period.
To ascertain the financial position (assets, liabilities and capital) at a given date.
To provide information to users for decision-making.
To show the stewardship/accountability of management over the resources entrusted to them.
To provide accounting records that serve as legal evidence.
To aid planning, control and comparison of performance.

(b) Characteristics of good accounting information

(c) Users of accounting information and their interests

User	Interest
Owners / shareholders	Profitability, return on and safety of their investment
Management	Planning, control and decision-making
Creditors / suppliers	Ability of the firm to pay for goods supplied on credit
Lenders / banks	Ability to repay loans and interest
Government / tax authorities	Assessment of taxes and regulation
Employees	Job security, wages and bonuses
Potential investors	Whether it is worth investing in the business
Customers	Continuity of supply

(a) Objectives of Financial Accounting (b)Characteristics of good accounting information (c) Users of accounting information and their interests