Baseline Corporation Was Formed Two Years Ago to Manufacture Fitness

question 60

Essay

Baseline Corporation was formed two years ago to manufacture fitness equipment.It has been profitable and is growing rapidly.It currently has 150 stockholders and 90 employees;most of the employees own at least a few shares of Baseline's common stock.The company has received financing from two banks.It will sell additional shares of common stock within the next three months and will also seek additional loans and hire new employees to support its continued growth.
1.Explain who relies on the information in financial statements prepared by Baseline Corporation.
2.Why is compliance with generally accepted accounting principles and accuracy in accounting important for Baseline?

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Definitions:

American Founding

The historical period during which the original Thirteen Colonies declared independence from Britain and established the United States.

Declaration Of Independence

A historic document drafted by Thomas Jefferson, declaring the thirteen American colonies' independence from British rule in 1776.

Constitution

The fundamental principles or established precedents according to which a state or other organization is governed.

Economic Freedom

The fundamental right of every human to control his or her own labor and property, including the freedom to trade and to partake in markets.