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The material explains how financial accounting focuses on transactions with economic effects, describes why organizations need systematic procedures for recording and reporting, and justifies financial accounting in entities with multiple stakeholders.",{"@graph":14,"@context":71},[15,34,54],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/exam/","Exam",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/mba-8101-foundations-of-accounting-introduction/648308/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":48,"encodingFormat":47,"isAccessibleForFree":49,"interactionStatistic":50},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/mba-8101-foundations-of-accounting-introduction/648308.png","ImageObject",300,407,{"name":42,"@type":43},"Franzy","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-23",true,{"@type":51,"interactionType":52,"userInteractionCount":4},"InteractionCounter",{"@type":53},"ViewAction",{"@type":55,"mainEntity":56},"FAQPage",[57,63,67],{"name":58,"@type":59,"acceptedAnswer":60},"What is the nature and purpose of financial accounting?","Question",{"text":61,"@type":62},"Financial accounting identifies, measures, and reports economic information so relevant users can make informed decisions. It focuses on transactions that have an economic effect on the business.","Answer",{"name":64,"@type":59,"acceptedAnswer":65},"What are the main objectives of financial accounting?",{"text":66,"@type":62},"The main objectives are to report financial performance over a period, financial position at a given date, changes in cash position, changes in assets and liabilities, and changes in owners’ wealth.",{"name":68,"@type":59,"acceptedAnswer":69},"Who uses financial information and how is this group classified?",{"text":70,"@type":62},"Users are parties directly or indirectly related to the business with an interest in its existence. 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Accounting is only concerned with those transactions that have an economic effect, tries to measure i.e. attribute monetary value to the transaction and prepare reports to the relevant users.  \nMBA 8101 2014 Foundations of Accounting 4  \n1. Nature and purpose of accounting  \nFinancial accounting is justified to the extend that an entity carries out numerous transactions and may have several interested parties (users) .  \nUnlike an individual, a business must be able to have in place proper procedures of collecting the information, recording, classifying, summarizing and reporting these economic transactions  \nMBA 8101 2014 Foundations of Accounting 5  \n1.2The objective of financial accounting  \nThe main objective of financial accounting is to provide financial information that shows the following aspects of a business:  \n1. The financial performance during a given period: This is done by preparing a profit and loss (now referred to as income statement-I/S).I/S is a summary of the incomesand expenses of the business during a given period. Where incomes exceed expenses the business has made a profit otherwise the business has a loss. Incomes are increases in resources other than those resources introduced by owners or lenders.  \nMBA 8101 2014 Foundations of Accounting 6  \n1.2 The objective of financial accounting  \n2. The financial position as at a given date: Which is done by preparing a balance sheet (now referred to as statement of financial position-SFP) . The SFP shows the resources ina business (Assets) and how the resources have been funded. The funding is generally from two sources i.e. owners (Capital) and lenders (Liabilities) .  \nMBA 8101 2014 Foundations of Accounting 7  \n1.2The objective of financial accounting  \n3. Changes in cash position during a given financial period: This is also shown by preparing a cash flow statement (now called a statement of cash flows-SCF). A SCF is a summary of the cash balances at the beginning and end of the financial period and receiptsand payments made. The receipts and payments are classified into operating, investing and financing.  \nMBA 8101 2014 Foundations of Accounting 8  \n1.2 The objective of financial  \naccounting  \n4. Changes in financial position (assets and liabilities) : Which is done by preparing and presenting an opening and closing statement of financial position and relevant reconciliations of opening balances to closing balances of assets and liabilities.  \n5. Changes in Owners wealth (capital or equity) : Presenting the changes that have taken place in owners wealth by preparing a reconciliation of opening and closing balances ofthe owners capital. In companies this is also referred to a statement of changes in owners equity.  \nMBA 8101 2014 Foundations of Accounting 9  \n1.3 Users of financial information  \nA user of financial information is normally the party tha","cbCaiu5uP1HNLPpN","https://ap.wps.com/l/cbCaiu5uP1HNLPpN","pdf",700876,79,"English","# Introduction\n## Nature and purpose of financial accounting\n## Objective of financial accounting\n## Users of accounting information\n## The accounting equation","[{\"question\":\"What is the nature and purpose of financial accounting?\",\"answer\":\"Financial accounting identifies, measures, and reports economic information so relevant users can make informed decisions. It focuses on transactions that have an economic effect on the business.\"},{\"question\":\"What are the main objectives of financial accounting?\",\"answer\":\"The main objectives are to report financial performance over a period, financial position at a given date, changes in cash position, changes in assets and liabilities, and changes in owners’ wealth.\"},{\"question\":\"Who uses financial information and how is this group classified?\",\"answer\":\"Users are parties directly or indirectly related to the business with an interest in its existence. Although many users exist, accounting generally classifies them into seven groups.\"}]","MBA 8101 - Foundations of Accounting - Introduction | PDF",199]