Chapter 1

Question 1

name me all the stakeholders.

Answer 1

Owners and shareholders
Managers
Employees
Lenders of funds
Suppliers
Customers
government
Competitors.

Question 2

What is the decision of owners and stakeholders?

Answer 2

-Whether to continue to invest in the business or sell the business, depending on the risks and returns related to the business

Question 3

What is the decision of managers?

Answer 3

-to consider ways to improve the performance of the business

Question 4

What is the decision of Empployees?

Answer 4

-whether to continue to work for the business, depending on their pay increment and career opportunities

Question 5

What is the decision of Lenders of funds?

Answer 5

• whether to grant loans to the business, depending on the business ability to repay the loan principal and interest.

Question 6

What is the decision of suppliers?

Answer 6

–whether to sell to the business on credit, depending on its ability to pay

Question 7

What is the decision of Customers?

Answer 7

-whether to buy from the business, depending on the business ability to provide goods and services and after-sale service

Question 8

What is the decision of Government?

Answer 8

-whether to buy from the business, depending on the business ability to provide goods and services and after-sale service

Question 9

What is the decision of competitors?

Answer 9

-whether they are comparable to the business and how to improve their own performance.

Question 10

What is the role of accounting?

Answer 10

-to provide financial information to stakeholders to help them make informed decisions regarding the management of resources and performance of the business.

Question 11

What are the two roles of accountants?

Answer 11

• to set up an accounting information system to provide the accounting information to stakeholders to aid them in their decision making.
• to be stewards of the business financial resources, ensure they are efficiently override and effectively invested to make profits

Question 12

What is the first professional ethic of an accountant?

Answer 12

1. Intergrity.

- being straightforward and honest in all professional relationships.

Question 13

What is the second professional ethic of an accountant?

Answer 13

2. Objectivity.

- will not let bias, conflict of interest or undue influence of others override his professional judgment.

Question 14

What is the purpose of accounting theories?

Answer 14

TO present a true and fair view of the business financial performance and position, to help stakeholders make reliable and informed decisions.