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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Why is there a demand for accounting information? Name five groups that create demand for accounting information about businesses, and describe how each group uses accounting information.

To determine

Concept Introduction:

Accounting:

Accounting is an art of recording, classifying, analyzing and summarizing the financial statement to produce meaningful information and reports.

The reason for demand of the accounting information and five groups that create the demand.

Explanation

Accounting is an art of recording, classifying, analyzing and summarizing the financial statement to produce meaningful information and reports. Accounting information is useful for the users because it provides the summarized and analytical reports at one place which helps the users to fulfil their objectives. The groups that create demand for the financial information are explained as follows:

  1. Lender or creditors: Lender or creditors need the financial information to analyze the credibility and debt repayment capacity of the company.
  2. Owners: Owner’s require the financial information to analyze the profitability of the business and return on their investments...

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