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Accounting-Measures business activities by recording data about them for future use. The data are stored until needed and then processed to become useful information. The information is communicated through reports to decision makers.
Profitability - is the ability to earn enough income to attract and hold investment capital.
Liquidity - is the ability to have enough cash to pay debts when they are due.
Operating Activities – include selling goods and services to customers, employing managers and workers, buying and producing goods and services, and paying taxes.
Investing Activities – involve spending the capital a company receives in productive ways that will help it achieve its objectives.
Bookkeeping - is mechanical and repetitive; it is the process of recording financial transactions and keeping financial records.
Management Information System - consists of interconnected subsystems that provide the information needed to run a business.
Ethics - is a code of conduct that applies to everyday life.
Example is Enron Corporation
Sarbanes-Oxley Act - to regulate financial reporting and the accounting profession, among other things.
Management-Refers to people who are responsible for operating a business and meeting its goals of profitability and liquidity.
Basic Management Functions-Financing the business, Investing resources, Producing goods and services, Marketing goods and services, Managing employees,
Providing information to decision makers
Investors - may invest in a business and acquire a part ownership in it are interested in its past success and potential earnings.
Creditors - those who lend money or deliver goods and services before being paid, are interested mainly in weather a company will have the cash to pay interest charges and to repay the debt at the appropriate time.
Business Transactions-Are economic events that affect a business’s financial position. A transaction can be an exchange of value between two or more parties.
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