What is the purpose of accounting in society?

It helps people in the society to analyze business current situation, its current profitability and future growth of the company.

Technology is increasingly used to process accounting data. Why then must we study and understand accounting?

Technology is just a tool used to process the system but without proper understanding, technology will be unable to solve our
purpose. Technology prevents human eerors and provides accurate records but for better understanding of transactions from
the beginning we need accounting. In addition to this accounting technology can be tailor made and customized according to
the need but to analyze the need we need detailed information on accounting

What ethical issues might accounting professionals face in dealing with confidential information?

The main ethical issue is maintaining confidential information, since misleading information can lead to a wrongful closing of
division that harms workers, customers and suppliers

Identify four kinds of external users and describe how they use accounting information.

Investors: are the first type of external user in the field of accounting. An investor is anyonewho buys stock in a company or
funds a company's operations. Accounting is critical forinvestors because a company's balance sheet can give clues as to the
firm's financial health.Knowing the firm's financial health, or at least having a good approximation of it, is howinvestors decide
what actions to take with existing stock in a company or whether or not theyshouldinvestin the first place.+

Creditors: are the second type of accounting external user. A creditor is any individual orinstitution that has lent a firm money.
Usually, creditors are banks. Banks use the accountingstatements put out by a company to assess the company's lending risk. If
creditors find too manyliabilities or debts on a firm's balance sheet, they may be less prone to lending large sums of money to
the firm.+

Tax authorities: are any organization assessing a firm's tax liability. In the United States, anexample of a tax authority would be
the IRS. A country's tax authority uses a firm's accountingto determine how much money the firm owes based on the corporate
tax rate and other taxprinciples. A tax authority may also use accountants and accounting to determine a firm'sassetsand tax
obligations if the firm has failed to pay the proper amount of taxes in the past.+

Customers: need accounting information to determine a company's financial health and toproject its future financial solvency.
While the individual consumer may not be looking often at acompany's accounting methods and results, other firms that do
business with a company do

What are at least three questions business owners and managers might be able to answer by looking at accounting
information?

What resources does an organization own? What debts are owed? Howmuch income is earned? Are expenses reasonable for
the level of sales? Are customers' accounts being promptly collected

Describe the internal role of accounting for organizations

Routine internal reporting: These reports which are periodically generated are used bymanagers of the company for their
internal decisions.+ Non-routine internal reporting: This information or reports are generated to support projectsand other
decisions that come up as the need arises from them

Accounts Payable vs Note Payable

Accounts payable are short-term financial obligations that do not involve any written agreement to pay within a specific period
of time. They are listed as a current liability.

Notes payable represent a written promissory note that a company receives when it borrows money from a lender. They are
usually offered by financial institutions such as banks and financing or credit companies to people who want to purchase
something but do not have enough cash.
What type of business is most likely to select a fiscal year that corresponds to its natural business year instead of the
calendar year

The type of business that is most likely to select a fiscal year that corresponds to its natural business year instead of the
calendar year is companies with a lot of seasonal variation in sales.

Assume Samsung has unearned revenues. What is unearned revenues and where is it reported in financial statements?

An unearned revenue refers to cash received in advance of providing products and services. It is reported in the liabilities of the
financial statements when cash is accepted. However, as the products or services are provided, the unearned revenues become
earned revenues