Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 1 - Introduction to Financial Statements - Questions - Page 27: 4

Answer

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Work Step by Step

Without accounting, the economic system would crumble; companies must keep a record of the flow of cash and liabilities as well as equities in order to assess future growth. If they did not do so, owners would not know where profits were flowing and how to divide earnings, resulting in bankruptcy.
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