ACCT 201 1st Edition Lecture 3Outline of Last Lecture I. Forms of businessesOutline of Current Lecture II. Users and Users of Financial InformationIII. Financial StatementsCurrent LectureThis introduction is taken directly from the textbook:“The purpose of financial information is to provide inputs for decision-making. Accounting is theinformation system that identifies, records, and communicates the economic events of an organization to interested users. Users of accounting information can be divided broadly into two groups: internal users and external users.”Internal users are managers who plan, organize, and overall run a business, such as marketing managers, production supervisors, and finance directors. They analyze financial information use it to make decisions to run the company more effectively. External users includecreditors, investors, and tax authorities such as the Internal Revenue Service (IRS). They use financial information to evaluate companies to decide whether or not to invest and to insure the companies are complying with tax laws. The financial information that both internal and external users utilize can be found in the four financial statements for the business.The four financial statements include:1. An income statement (Listing revenue and expenses)2. Statement of shareholders’ equity3. Balance sheet4. Statement of cash flowsAll of these statements flow like a waterfall into each other. Each relates to another aside from the statement of cash flows, which flow up to the balance sheet. This means that in completing them, if something isn’t correct in the income statement, then everything after will be inaccurate because of the initial error and each statement must be redone. They are all These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.required in an annual report and must show current year as well as two years prior. These statements are the first things that auditors look at in the event of an audit on the company. The professor looks back to the Apple website, showing that you can find their annual report on their site, available for potential stockholders (or shareholders, because both refer to the same thing) to review and consider before
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