ABM1_Concepts and Principles.pptx

2. 1. Statement of Financial Position
2. Income Statement
3. Statement of Changes in Equity
4. Statement of Cash Flows
5. Notes, comprising of a summary of significant accounting
policies and other explanatory information

3. Who are the users of these
information?

7. OWNER/STAKEHOLD
ERS
MANAGER EMPLOYEES

8. They provide capital to the business.
They need accounting information to check if
the business is well. Accounting information
also helps them in deciding whether to
withdraw or increase their investments.
Overall, they are interested to know if the
business is profiting and how much.
OWNER/STAKEHOLDE
RS

9. OWNER/STAKEHOLD
ERS
MANAGER EMPLOYEES

10. They are people employed by
the company to perform
management functions such as
planning, organizing and running
the business affairs.
MANAGER

11. OWNER/STAKEHOLD
ERS
MANAGER EMPLOYEES

12. They are ordinary company
employees who assess the
company’s profitability and
stability, and their consequence
on future salary and job security.
EMPLOYEES

13. INVESTORS CREDITORS
CUSTOMER
S
SUPPLIERS
GOVERNMEN
T
PUBLIC ACADEME

14. They are individuals or other business
planning to invest in the company. To be
able to make sure that the company is
worth putting their money in, they check
its financial statements and make
decisions based on the accounting
information gathered.
INVESTORS

15. INVESTORS CREDITORS
CUSTOMER
S
SUPPLIERS
GOVERNMEN
T
PUBLIC ACADEME
Banks and
Other Lenders

16. They are individuals, institutions or banks
who have lent or are planning to lend money
to the company. They need to check the
company’s financial statements in order to
assess its credit worthiness and the
capability of the business to pay its
obligations including related interests on
maturity date.
CREDITORS

17. INVESTORS CREDITORS
CUSTOMER
S
SUPPLIERS
GOVERNMEN
T
PUBLIC ACADEME
Banks and
Other Lenders

18. Banks and Other Lenders
Lenders would like to know if a business is
capable of paying debts. Lenders often asses the
stability of the business as well as cash flows and
profitability. They are particularly interested in
the ability of a business to pay borrowings and
the corresponding interests when they become
due.

19. INVESTORS CREDITORS
CUSTOMER
S
SUPPLIERS
GOVERNMEN
T
PUBLIC ACADEME
Banks and
Other Lenders

20. They refer to people who buy goods
or acquire services from the company at
a price. They check the financial
statements of their suppliers in order to
determine if they are a stable source of
supply over a long period.
CUSTOMERS

21. INVESTORS CREDITORS
CUSTOMER
S
SUPPLIERS
GOVERNMEN
T
PUBLIC ACADEME
Banks and
Other Lenders

22. They are businesses that provide
supplies to other businesses. They
check the financial statements of
their customers in order to
determine if debts owed to them
will be paid when due.
SUPPLIERS

23. INVESTORS CREDITORS
CUSTOMER
S
SUPPLIERS
GOVERNMEN
T
PUBLIC ACADEME
Banks and
Other Lenders

24. The government is concerned about
regulating businesses and their effects to the
economy. They also want to check if businesses
are paying their taxes honestly. Thus, they check
the financial statements of businesses. Examples
are the Bureau of Internal Revenue, which is a tax
authority, and the Securities and Exchange
Commission which is a regulatory body.
GOVERNMENT

25. INVESTORS CREDITORS
CUSTOMER
S
SUPPLIERS
GOVERNMEN
T
PUBLIC ACADEME
Banks and
Other Lenders

26. The general public is composed to
individuals who are not related to the
company. However, they use the financial
statements of a company to determine
how it affects the economy, and pinpoint
possible prospects for employment.
PUBLIC

27. INVESTORS CREDITORS
CUSTOMER
S
SUPPLIERS
GOVERNMEN
T
PUBLIC ACADEME
Banks and
Other Lenders

28. Educational institutions use
accounting information from the
financial statement of a company
for academic purposes.
ACADEME

29. Activity TIME!!!!!!!
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