Accounting/561

can you answer the 3 responses today by 10pm central standard

1. After reading this chapter, it is clear that by allowing internal users access to financial statements the entire company will benefit. Everyone from the marketing team, finance team, production team and HR team are able to make better decisions based on the companies financial standing. Understanding each departments role in the success of a company allows for better communication and team work throughout the organization. Decisions can be based on the company mission as a whole instead of by departments goal.  Having this open communication about financial success or failure lets employees feel more invested and understanding when decisions are made. 

2. Financial statements are important to all people who are involved in a company.  Managers use the statements to determine needs for services needed and expected by the purchasers.

If sales are down, production should also be lowered to limit excessive inventory.  However, if demand for products are high, then inventory should be increase to meet supply of product expectation.

Directors are responsible to the financial health of the corporation or company.  Directors oversee financial obligations and ensure the business is still in a profitable mode.  The directors decide if marketing is doing it's job through selling the products to clients and if there is a need to seek out other clients through marketing and sales.

In addition Directors are responsible to the financial health of the business. They have to initiate and create interest in the financial side to ensure the business is profitable and can obtain loans to keep the production of products being produced and sold to keep the profit in a positive situation.

3. In general, the main purpose of the financial statements is to provide a detailed information about the company's situation, liabilities, and if they have room to grow in the future. With this information, the owner, directors, and managers - in high levels - can analyze, review, and decide the best for the company.

Operational information, product/service cost, inventory, budget, and trend analysis can be found in the financial statements. This will help to decide if a product can be produced in the company or purchased. If a machine/equipment should be rented or not. The raw material and everything related with production and goods.

On the other hand, the internal users always found useful information about sales and the number of customers; this will allow them to know their current situation and forecast future business. At the same time, they can track all the payments received and past due accounts. Based on this information they can decide which department needs support, which one needs to be motivated to reach a goal and which one needs to reduce their expenses. Allocation is another important concept when we talk about expenses.

These reports are so important that every decision made can lead them to success or fail.