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UNIT THREE READING ACCOUNTING Accounting is the process of recording, classifying, analyzing, summarizing, reporting and interpreting the financial information of an organization for use in decision making. Accountants record, report and interpret financial information that describes the status and operations of a company aids in decision making. Like statistics, accounting is the language of business. It provides information to both people inside and outside the company. Inside the company, managers are the major users of accounting information. Accounting data are used by managers to help them plan and control business operations. Outside the company, stockholders, bankers, potential investors, and government, etc. are interested to know the financial position of the company. For instance, bankers can base their decision on granting a loan to the company by examining it’s financial statements. Government needs to know the financial data of the company for tax assessment...

READING INTRODUCING ACCOUNTING Accounting provides a financial picture a business firm. An accounting department records measures the activity of a business and reports on the effects of these transactions on the firm’s financial condition. Accounting records and reports provided data that are used by management, stockholders, creditors, independent analysts, banks and government. The income statement and balance sheet are the two types of records that most business prepare regularly. By reading these statement, once can identify how money was received and spent by a company. By analyzing these records, one can determine whether or not the activities of the company have been good for it. One major tool for the analysts of accounting records is ration analysis. A ration analysis is the relationship of two figures. There three main categories of ration in finance. One such ratio deals with profitability. The main example of this is the Return on Investment Ration, which is t...