Why are financial reports and accounting information important to businesses?

"After reading this chapter, you should be able to answer these questions: Why are financial reports and accounting information important, and who uses them? What are the differences between public and private accountants, and how has federal legislation affected their work? What are the six steps in the accounting cycle? In what terms does the balance sheet describe the financial condition of an organization? How does the income statement report a firm’s profitability? Why is the statement of cash flows an important source of information? How can ratio analysis be used to identify a firm’s financial strengths and weaknesses? What major trends affect the accounting industry today?\n\nFinancial information is central to every organization. To operate effectively, businesses must have a way to track income, expenses, assets, and liabilities in an organized manner. Financial information is also essential for decision-making. Managers prepare financial reports using accounting, a set of procedures and guidelines for companies to follow when preparing financial reports. Unless you understand basic accounting concepts, you will not be able to “speak” the standard financial language of businesses. This module examines the role of accounting in business, how accounting contributes to a company’s overall success, the three primary"