How is accounting information use by internal and external users?
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accounting information is used by internal users in this way.The internal users like employees of the business they want to know the financial position of business so that they can work without any burden of harmful news for their business.Second external users use the information for their investment.like investers who wants to invest money in the business firstly they want to know the financial position of bussiness.their liabilities,assest,debtors and creditors informations help them to know about the owner of the company.it is very important to know the position of business before investment.so in this way accounting information helps them.
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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 .
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