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Customers - They are the purchasers of the organizations. They are reliant on the organizations


                       for the products or services for the purpose of personal consumption or for resale, their main

                       purpose for accounting information is in order to evaluate the capability of the firms to continue

                       supplying them with their needs in the future.



                       Suppliers - These are the parties responsible for providing the organizations and institutions

                       with the products or services necessary for operation and sustenance. Usually, suppliers are

                       compensated either in cash or in credit basis. Their need for accounting information comes from


                       the intention to determine whether the organization is capable of meeting its obligations to pay

                       for the supplies it receives either on the short or long run.



                       Lenders - They are the parties that provide alternative capital sources to the organizations.

                       While the owners provide equity capital, lenders usually provide the organization with debt

                       capital and usually get a return in the form of interest. Examples of lenders include debenture


                       holders in companies, banks and other financial institutions that grant loans. The need to have

                       real-time accounting information on the economic performance and financial position of

                       organizations is in order to assess whether the entities are sufficiently profitable to pay the


                       interest on loans and whether the organizations possess enough resources to pay back the

                       principal amount.


                The accounting equation



               The accounting equation is a basic principle of accounting and a fundamental element of the balance

               sheet. The equation is as follows:


                                            Assets = Liabilities + Shareholder’s Equity



               Examples of items that fall under each section:




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