CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Firm exist to provide goods and services for consumers and in return to provide rewards to its owners. Therefore, most business organizations strive to make profit: and provide services for its customers. In similar way, without products and services there will be no profit and without profits or income business enterprises cannot be sustained or made to grow. However, in a situation where the organizations is a non-profit type it requires that it should be arranged and managed in such a way that the value of its products or services should at least cover the run cost or its fixed assets requirements, most organization need efficient management decision making. This is an irrational subject approach that relies on the managers, instincts managers to day, need a systematic approach that relies mainly on decision making because an environment in which it functions are far from complex that in the past and the cost of making mistake is becoming graver Ugbani, (2007). Furthermore, the role of accounting information in the decision making process for it existing and shareholders is probably the most pensive, indeed it is only with accounting information that the basic need of the shareholders can be met by providing financial statement that show the sources from which the funds employed in the organization have been raised and the uses to which they have been put.
The typical financial accounting report includes the following: 1. The balance sheet 2. The income statement 3. The appropriate account 4. Cash flow statement 5. Value added However, the practice of some of these reports is expending or modified into organization and users needs of accounting information services. Further, various users have different decision needs that often differ. In order that accounting may be most useful, it is adopted to the particular needs of these users. The various users of accounting information include: i. The shareholders and investors whose main concern is with the value their capital and expected dividend. ii. Management whose planning controlling and decision making function would be highly ineffective without quality information. Financial reports are also an indication of management efficiency. iii. Creditors and supplier such as bankers, bond holders suppliers or goods and services their product from accounting information, the profitability and financial soundness of the business to enable them decide whether to expand or decrease financial commitment in the business. iv. Government in order to calculate the companies tax liability regulates rules and involves polices through the use of accounting
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