How does the title relate to the description of accounting as the “language of business” and to accounting as being useful for decision making? b. Explain how the decisions you would make might differ if you were an external investor or a member of an enterprise’s management team.
Answers
Accounting is often called the “Language of business.” It is a means of communicating information about a business. ... After analyzing properly the information supplied by the accounting statements, the users of the same take decisions for future activities.
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Answer:
Describing financial accounting as being useful for decision making by investors or creditors and as the language of business are very consistent. For information to be used by decision makers, whether internal or external, that information must be communicated. The process of communicating the information is why accounting is sometimes referred to as the language of business.
Communication involves a sender and a receiver. The message between the two is communicated in some manner, which could be words, numbers, or in some other way. While communicating accounting information usually involves numbers that are stated in terms of a monetary unit, such information also requires words for the monetary information to be meaningful.