Principles of Financial Accounting · free preview
Why Accounting Matters to Business Stakeholders
Stakeholders are the people and groups who rely on financial information to make decisions, including stockholders, creditors and lenders, regulators, customers, and employees, each asking a different question of the same reports.
1. Stakeholders share one need with different questions
Stakeholders share one need with different questions
2. Stockholders and the two forms of ownership
Stockholders and the two forms of ownership
3. Creditors, lenders, and the price of risk
Creditors, lenders, and the price of risk
4. Regulators, customers, and employees
Regulators, customers, and employees
5. Public versus private ownership
Which statement correctly contrasts publicly traded and privately held companies?
6. Repayment risk
Why do lenders generally charge more interest for longer loans?
7. Three ways to raise capital
Which list names the three general ways a business raises capital?
8. The SEC's core goal
What is the primary goal of Securities and Exchange Commission regulation of financial reporting?
9. Stakeholder definition
Complete the definition. A person or group who relies on financial information to make decisions because they have an interest in the economic viability of an organization is called a ____.
10. The fee for borrowed money
When a business borrows from a lender for a long period, the lender charges a fee for the use of the money. Give the one-word name of this fee.
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