Page 158 - Book-keeping for Secondary Schools Student’s Book Form One
P. 158
Book-Keeping for Secondary Schools
statements because it enables them to
Activity 7.2
evaluate their business with reference to
Collect two copies of financial statements the targeted profit.
from newspapers and other online
reliable sources, including websites Prospective investors or buyers of the
FOR ONLINE READING ONLY
that you may be able to reach and: business
These are people who are interested in
1. Identify the items that you can committing their money to invest or
not understand in the financial purchase part or the whole business in
statements then discuss with your order to benefit from the profit generated.
fellow students. Before the prospective investor or buyer
2. Demonstrate how the accounting purchases a business, he or she would
equation balances. want to see its financial statements to
evaluate its ability to make profits. This
information is very important in making
Common users of financial statements informed decision on whether to invest in
The information presented in the financial the business or not.
statements is useful to different users
of financial statements depending on Investor: A person (or entity) who
what the information is needed for. The puts his or her money into business
following is a list of common users of in order to become one of the owners
financial statements and the reasons for for the purpose of getting a share of
seeking such information. the profit generated.
Managers Tax inspectors
Managers are supervisors of enterprises Tax officers from tax authorities, such as
on daily basis. They are interested in the the Tanzania Revenue Authority (TRA)
information presented in the financial and the Zanzibar Revenue Authority
statements to know the performance of (ZRA) would want to see the financial
the business. The financial statements statements of an enterprise to establish
may also be useful for managers in appropriateness of calculations and the
making future plans.
amount of tax to be paid by the enterprise.
Owners of business Bankers
These are the people who invested their Different banks that the entrepreneur may
money or other resources into the business approach for loans and other services
with the objectives of making a profit. would want to know the performance
Therefore, they will be interested in the trend of the business in order to make
information presented on the financial
150
Student’s Book Form One
Book Keeping Form 1 New 2024 FINAL.indd 150 18/10/2024 10:14
