Financial Accounting ideas

Basics of Financial Accounting
Objectives of Accounting
The basic objectives of accounting are to provide financial information to the managers,
owners and the stakeholders i.e. the parties who are interested in an organisation. To attain
such objectives various financial statements are prepared.
The users of financial statements may be broadly classified in the following groups –
(a) The investor – This group includes both existing and potential owners of shares in
companies. They are broadly interested in the performance of the entity and the
dividend declared by such entity. They also measure the social and economic policies
of the company to decide whether they will remain associated with such entity.
(b) The lender – This group includes both secured and unsecured lenders. Such creditors
may be financing long term or short term loans. The financial statements are analysed
to determine an organisation’s ability as to  Click to Download