A local North Atlanta Certified Public Accountant (CPA) explains basic accounting principles:
Investors, creditors, and others often use reported earnings and information about the components of earnings in various ways and for various purposes in assessing their prospects for cash flows from investments in or loans to an enterprise. For example, they may use earnings information to help them evaluate management performance, estimated earning power or other amounts they perceive his representative of long-term earning ability of an enterprise, pretty future earnings, or assess the risk of investing in such enterprise.
North Atlanta certified public accountants may use the information to confirm, reassure themselves about, or reject or change their own or others earlier predictions or assessments. Measures of earnings and information about earnings disclosed by financial reporting should, to the extent possible, be useful for those and similar uses and purposes.
However, accrual accounting provides measures of earnings rather than evaluations of management's performance, estimates of earning power, predictions of earnings, assessment of risk, or confirmations or rejections of predictions. No matter what your accounting needs are, our CPAs are here to help.