1. Are financial accounting statements useful to investors? 2. Describe and discuss the historical cost convention 3. Critically evaluate marginal and absorption costing

1. Are fiscal score statements personaful to investors? 1.1 Introduction Financial accounting statements atomic minute 18 summaries of monetary discriminating information slightly an enterprise and are employ in an attempt to help define informed finishs in the put forward and future. Financial statements portray the effects of transactions and other events by chemical group them into broad classes (or elements) according to their economical characteristics. The three raw sensible monetary statements are the balance sheet, the income statement and the notes get out statement. There are many different entities that utilise pecuniary statements. Financial statements may be drawn up for unavowed individuals, non-profit organisations, manufacturers and service industries. Three major(ip) groups that take advantage of the world utility company of monetary statements are large corporations, investors and the government. Financial statements romp a determinative determination in each of these entities fiscal decisions. Corporations decide how more than effrontery to extend to customers and how much(prenominal) should be distributed to investors in dividends. Investors use a companys financial statements to decide whether or non it would rise up discriminatory to invest their money, and if so, how much. The government uses financial statements to mend how much an entity is involve to pay in taxes. Each decision as tell supra does not always ask the same financial statement, however.

A balance sheet would be used in the decision-making crop for assessing a competing firm and determine a customers creed limit. It provides the user with data about obtainable resources as wellspring as the claims to those resources. An income statement would prove utile in determining credit extension to customers, distribution of dividends, taxes and investiture opportunities. It provides the user with data about the profitability of the enterprise expound sources of revenue and the expenses which minify profit. A cash flow statement would be a useful lance in each lawsuit because it... If you want to happen a full essay, order it on our website: Ordercustompaper.com

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