Question

Explain the various users of accounting information

Answer 1

Accounting information is presented to internal users usually in the form of management accounts, budgets, forecasts and financial statements. External users (Secondary Users) of accounting information include the following: Creditors: for determining the credit worthiness of the organization

Answer 2

Internal users :-

♥ Owners - They contribute capital in the business and are exposed to maximum risk .

♥ Management - They make decisions such as determination of selling price , cost , etc...

♥ Employees - They are entitled to bonus at the end of the year which is dependant on the profit earned by the enterprise .

External users :-

♥ Banks - Provide loans to business by watching their performance . They assess it by analysing the accounting information .

♥ Creditors - Supply goods and services on credit . Before granting it , they analyse the credit worthiness of business .

♥ Researches - They use it in their research work .