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  • Users of Accounting Information HW

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    Advika Sharma
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    The users of accounting information can be divided into internal users and external users. Internal users include owners, management, and employees who use accounting information to evaluate performance, make decisions, and ensure compliance. External users include banks, investors, creditors, government, researchers, consumers, and the public who use accounting data to assess risk, make investment and lending decisions, conduct research, and monitor economic activity. Proper accounting helps all users by providing a full picture of a company's financial health and operations.

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    The users of accounting information can be divided into internal users and external users. Internal users include owners, management, and employees who use accounting information to evaluate performance, make decisions, and ensure compliance. External users include banks, investors, creditors, government, researchers, consumers, and the public who use accounting data to assess risk, make investment and lending decisions, conduct research, and monitor economic activity. Proper accounting helps all users by providing a full picture of a company's financial health and operations.

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    42 views8 pages

    Users of Accounting Information HW

    Uploaded by

    Advika Sharma
    The users of accounting information can be divided into internal users and external users. Internal users include owners, management, and employees who use accounting information to evaluate performance, make decisions, and ensure compliance. External users include banks, investors, creditors, government, researchers, consumers, and the public who use accounting data to assess risk, make investment and lending decisions, conduct research, and monitor economic activity. Proper accounting helps all users by providing a full picture of a company's financial health and operations.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 8

    USERS OF

    ACCOUNTING
    INFORMATION

    BY ADVIKA SHARMA 11F


    WHO ARE THE USERS OF ACCOUNTING
    INFORMATION?
    The Users of
    accounting
    information

    Internal External
    Users Users
    Owners
    THE
    INTERNAL
    USERS OF Management
    ACCOUNTIN
    G
    Employees
     Owners: Owners the one ones exposed to maximum risk as they contribute capital to the business. They would naturally be
    interested in knowing the profits gained or losses incurred by the business, along with the safety of their capital. The financial
    statements would give them that information which helps them to analyze the viability and profitability of their investments.
     Management: Accounting information is used by management for taking various decisions such as determination of selling price,
    cost controls and reduction, investment into new projects etc.
     Employees: Employees who are entitled to bonus at year-end are interested in the financial statements to assess the ability of the
    business. The financial statements also reflect whether the enterprise has deposited its dues toward Employees’ Provident Fund and
    Employees’ State Insurance or not.

    INTERNAL USERS
    THE EXTERNAL USERS OF ACCOUNTING

    Banks and Government


    Financial Investors Creditors and its
    Institutions Authorities

    Researchers Consumers Public


     Banks and Financial Institutions: Banks and Financial Institutions being the loan
    providers to businesses, watch the performance of the business to know whether it
    is making progress as projected to ensure safety and recovery of the loan advanced
    and payment of interest. The accounting information helps them access that.
     Investors and Potential Investors: Investors do not have direct control over the
    business affairs. Thus, they rely on the accounting information available to them to

    EXTERNAL check things such as- the earning capacity of the enterprise and safety of their
    investments.

    USERS  Creditors: Creditors are those parties who supply goods and/or services on credit.
    Before granting credit, creditors satisfy themselves about the credit-worthiness of
    the business. The financial statements help them immensely in making such an
    assessment.
     Government and its Authorities: The Government uses financial statements to
    compile national income accounts and other information and that enables it to take
    policy decisions. Government levies varied taxes such as custom duty, GST and
    income tax.
     Researchers: Researchers use accounting information in their research work.

     Consumers: Consumers require accounting information for establishing good

    EXTERNAL
    accounting control so that cost of production may be reduced with the resultant
    reduction in the prices of products they buy. Fixed fair prices should be put on
    the products so that consumers and producers are not exploited.

    USERS  Public: The public wants to see the business running so that since it makes
    substantial contribution on the economy in many ways. Financial information
    can be provided to various user groups for decision-making by financial
    accounting.
    THANK YOU

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