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Accounting Information and Decision Making - Assignment Example

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The income statement is an indicator of the amount of money earned within a certain period of time and the expenses incurred within that same…
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Accounting Information and Decision Making
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"Accounting Information and Decision Making"

Download file to see previous pages If I were an investor, I would turn to an income statement first when looking to invest in accompany. This is because this statement will show me the operations undertaken within a certain period of time and the income and expenses. This shows whether the entity is doing well and expanding or whether it is performing poorly and may not do well in the coming months or years. I have ever reviewed the financial statements for a company I have worked for.
My classmate is correct on the “dual effect” statement. This is because for every transaction, one account will increase while another decreases. This is due to the double entry effect in accounting whereby an amount is removed from one account and put into another. This leaves one account with less and the other with an increased amount. An example is in the case of purchasing goods. When purchasing goods with cash, the cash account will be less the amount used for the purchases while the purchases account will increase with the monetary value of the goods purchased (Collier, ...Download file to see next pagesRead More
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