Accounting Information: A Means to an End:
The primary objective of accounting is to provide information that is useful for decision-
making purposes. From the very start, we reemphasize that accounting is not an end, but rather
it is a means to an end: The final product of accounting information is the decision that is enhanced by the use of that information, whether the decision is made by owners, managers
mint, creditors, governmental regulatory bodies, labor unions, or the many other groups that
have an interest in the financial performance of an enterprise
Because accounting is widely used to describe all types of business activity, it is sometimes refer read to as the language of business. Costs, prices, sales volume. ports, and return on
investment are all accounting measurements. Investors, creditors, managers, and others who have a financial interest in an enterprise need a clear understanding of accounting terms and Concepts if they are to understand and communicate about the enterprise. While our primary
Orientation in this text is the use of accounting information in business, from time to time WE emphasize that accounting information is also used by governmental agencies, nonprofit
organizations, and individuals in much the same manner as it is by business organizations.
ACCOUNTING FROMAUSER'S PERSPECTIVE
people think of accounting as simply a highly technical field practiced only by professional accountants. In reality, nearly everyone uses, accounting information daily. Accounting
information is the means by which we measure and communicate economic events. Whether manage a business, make investments, or monitor how you receive and use your money,
you are working with accounting concepts and accounting information.
Our primary goal in this. Book is to develop your ability to understand and use accounting information in making economic decisions. To do this, you need to understand the following
The nature of economic activities that accounting information describes.
The assumptions and measurement techniques involved in developing accounting information.
The information that is most relevant for making various types of decisions.
Exhibit 1-1 illustrates how economies activities flow into the accounting process. The accounting process produces accounting information used by decision makers in making eco-
economic decisions and taking specific actions. These decisions and actions result in economic activities that continue the cycle.
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