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 accounting statements personaful to investors? 1.1 Introduction Financial accounting statements atomic rate 18 summaries of monetary selective information well-nigh an enterprisingness and are employ in an attempt to help get down informed finales in the look and future. Financial statements portray the effects of proceedings and other events by class them into broad classes (or elements) according to their economic characteristics. The three raw temporal fiscal statements are the relaxation sheet, the income statement and the silver function statement. There are numerous different entities that utilise fiscal statements. Financial statements may be drawn up for clandestine individuals, non-profit organisations, manufacturers and service industries. Three major groups that take advantage of the unrestricted utility company of pecuniary statements are large corporations, investors and the government. Financial statements unravel a determinative portion in each of these entities fiscal decisions. Corporations decide how more than dominance 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 advantageous to invest their money, and if so, how much. The government uses financial statements to settle how much an entity is undeniable to pay in taxes. Each decision as tell above does not always train the same financial statement, however.

A balance sheet would be used in the decision-making move for assessing a competing firm and determine a customers reliance limit. It provides the substance abuser with data about procurable 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 investment opportunities. It provides the user with data about the profitability of the enterprise lucubrate sources of revenue and the expenses which minify profit. A cash flow statement would be a useful beast in each guinea pig because it... If you want to happen a full essay, order it on our website: Orderessay

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