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Financial Accounting

Introduction
Accounting is a service activity. Accounting process is defined as identifying, measuring, recording and communicating economic information to permit informed judgments and economic decisions. These are the critical elements of accounting. The primary objective of accounting is to provide information that is useful for decision making purposes. Accounting is widely used to describe all types of business activity. It is sometimes called as the “language of business”. Costs, prices, sales volume, profits, and return on investment are all accounting measurements. The final product of accounting information is the decision that is enhanced by the use of that information, whether the decision is made by owners, management, creditors, investor, or the many other groups that have an interest in the financial performance of an enterprise. They need a clear understanding of accounting terms and concepts if they are to understand and communicate about the enterprise.

Accounting information plays an important role to the various users to solve problems in the most effective way for decision making. For example, when the people from both inside and outside of the company identify the problem, they can refer the accounting information to find the solutions and select the most appropriate course of action to make their decision.

Content
Decision making can be regarded as an outcome of mental processes leading to the selection of a course of action among several alternatives. A final choice is produced in every decision making process. The output can be an action or an opinion of choice. When trying to makes a good decision, all alternatives must be considered including weighing the pros and cons of each alternatives. For effective decision making, a person must be able to predict the outcome of each option as well, and based on these items, determine which option is the best for that particular situation.
The accounting decision making...