Question

Chapter 1 Q2. Describe how accounting information helps shareholders and lenders to make decisions concerning the operations and performance of the entity Q3. List five stakeholders of accounting information. Describe the requirements for each one, for example, lenders would need information regarding the business's ability to repay debt and service a loan Stakeholder Accounting Information and decision making

Answer 1

Q2. The shareholders and lenders are the stakeholders of the entity. It means that their money is invested in the running of the entity and accounting information helps them understanding how much they have earned from the company by looking at the profits and the cash flows. The revenue analysis, positive cash flows and good net worth helps in understanding the entity's operations and also helps in ensuring that the company will continue its business in the future.

Q3.

Stakeholder	Accounting Information and decision making
Customer	Helps in analysing the company's business, comparing the information with the competitor and also check the company's going concern.
Government	Helps in analysing the tax payment structure and ensure correct tax amount is paid.
Financial Institutions	Helps in analysing the company's credibility and going concern ability.
Employees	Helps them in ensuring they are paid appropriately based on the company's growth and also to ensure their job is secured.
Shareholders	Helps in determing the Return on the Investment that they have made.