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Users of Accounting Information HW
Users of Accounting Information HW
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
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.
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