Name: Financial Statements - Lecture 1 - Uses and Users
Uploaded: 2017-06-23T13:29:31.000Z
Duration: 5 min 28 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

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Today, we're going to be talking about financial statements.

that identifies and records an organization's transactions

and then communicates them to a wide variety

A knowledge of accounting is relevant and useful

Every position requires some knowledge of accounting

or an understanding of how your actions in your position

both their profitability and their progress

You must be able to analyze the information from the past,

so you can adjust what you do in the future

to ensure the company you own or work for is profitable.

You need accounting information to make informed decisions

So just who are the users of financial information

and what information do they need to make decisions?

individuals who have questions about an organization.

And they need information to find answers and make

in order to predict what may happen in the future.

To do that, they need detailed accounting information

of accounting information, internal and external users.

Internal users plan, organize, and run businesses.

should we charge for our product or service?

Should we expand on global markets or not?

What products are profitable and which should be discontinued?

Internal users have access to a large amount of information.

And they will not be a focus of this course.

External users are outside of an organization.

are the key external users of accounting information.

That means that their decisions generally

So what questions do the main external users have?

Well, an investor might ask if a business is profitable enough

to give them a return on their investment.

And other creditors might ask if the bills

a company has outstanding will be paid in the future.

There are other external users that might also have questions.

if they will receive higher wages or better benefits.

Customers are interested in whether a business will honor

want to know if an organization is paying appropriate taxes.

Regulatory agencies, like the Securities Exchange Commission,

to know if a company is one that they want

But the key external users of accounting information

are still investors, lenders, and other creditors.

It's important to check your understanding.

And the best way to do that is to test yourself.

Periodically, you're going to see multiple choice questions.

and answer the questions yourself, before you check

Determining if a company can pay its obligations as they

come due is the primary objective of which

The primary objective of investors, competitors,

and labor unions is not whether a company can pay its bills

Yes, those external users are concerned about that.

Creditors, also called lenders, have a primary objective,

able to pay their bills as they come due.

What about ethics and accounting information?

In order for accounting information to be useful,

it must represent the actual economic activity

of an organization, what we call the underlying truth.

have extensive rules of conduct to guide what they report,

when they report it, and how they present it

Without ethics in accounting, the information

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Financial Statements - Lecture 1 - Uses and Users

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