MOD003319 Introduction To Accounting Anglia Ruskin University

Part 1

A. Identification and description on relevant stakeholders.

In this there are two kinds of stakeholder to collect the financial information so that they are able to take better financial decision. Users can be known as stakeholder and these are two types as are-

External stakeholders- it is inclusive of follows as are-

• Creditors- They work as to having effective determination of credit worthiness of the entity. In this the terms of credit are set by the creditors as per the customers financial statements. The creditors may be inclusive of lenders and suppliers of fiance such as banks.
• Tax authorities- They are those who works as to determine the credibility of the taxes filed on behalf of the enterprises.
• Investors- they are the person who take the decision in relation to analyses the amount which is need to be invested in the company. The investor need to sure about the return on investment.
• Customers- In order to access the financial position of the suppliers, it is important to maintain stable source of supply for longer period.
• Regulatory authorities- In order to ensure companies accounting information as per the rules and regulations which are set to protect the interest of stakeholders.

Internal stakeholders- This is inclusive as are-

Management – In order to analyze organization performance and takes steps to having improvement in the firms results.

Owners- This is helpful in order to analyze the viability and profitability of the investment and it is helpful in having determination of future course of action.

B Explanation on construction on financial statement meets their needs.

In this it can be said that financial statement is very helpful in relation to make the proper evaluation in equity decision and help them to make informed about the decision as how to give their vote on the corporate matters. Under this it states that operating profit margin is one of the important metric for evaluation of the companies financial management. These as are-

• Income statement- In this it is stated that income statement is one of the core financial stamens which reflect the profit and loss of the one specific period. It can be determine by taking all the revenues and subtracting it from expenses. It is helpful to stakeholder to the company in relation to have the information about revenue and losses so that they are able to take proper decisions.
• Balance sheet- It is the kind of financial statement which is helpful in relation to shows that what the profitability is earned by the company during the specific period. It shows firms assets, liability, debs and equity. Thus, the stakeholder can takes the effective decision.
• Cash flow statements- it reflects the changes in the balance sheets that how it gets affected.  It works as to breaks the analysis down to operating, investigating and financial activities. Tit is also useful to the companies' stakeholder din relation to take the better and effective decision.
• Statement change in equity- This is the statement which shows reconciliation of the beginning and ending balance of the firms. It is helpful in order to presenting the summary and various changes in the retained earning in U.S, GAPP etc. 

Part 2

a. Define the advantage and disadvantage of absorption and margina

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