So that the data must be reliable and accurate and must understand by the users of information. •Decision makers need information. The more important the decision is, the greater is the need for reliable information. Business records also help all businesses and most individuals to keep accounting record to help them aid for their decision making.
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What is the primary purpose of the accounting close process?The users of information and their information needs are as follows:
1.Investors- It helps them determine whether they should buy or sell.
2.Employees- They are interested in information about stability and profitability of their employers. They are also interested in information which enables them to access the ability of the enterprise to provide remuneration, retirement benefits and employment opportunities.
3.Lenders- They want to determine whether their loans and the related interest will paid when due.
4.Suppliers and Other trade creditors- They need information that enables them to determine whether amounts owing to them will be paid when due.
5.Customers- They need information about the continuance of the enterprise especially when they have long-term involvement with, or are dependent on, the enterprise.
6.Government and their agencies- are interested in the allocation of resources and therefore the activities of the enterprise. To regulate the activities of the enterprise and to determine the taxation policies ad as the basis for national income and similar statistics.
7.Public- The substantial contribution to local economy of the enterprise including the number of people they employ and their patronage of local supplier.