Question

What is accounting information what are the main users?

Answer 1

QUESTION:-

What is accounting information what are the main users?

ANSWER:-

◆ Accounting Information refersto the financial statements generated through the process of Book Keeping, use of which helps the users to arrive at decisions.

◆ The financial statements so generated are the Income Statement, i.e, profit and loss account and the Position Statement, i.e, Balance Sheet.

◆The information made available by these statements can be categoried into the following:-

1. Information relating to profit and surplus.

2. Information relating to financial position.

3. Information about cash flow.

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Answer 2

Accounting information is data about a business entity’s transactions .

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 .