Asked by William Russell on Jun 20, 2024
Verified
Discuss internal and external users of accounting information. What areas of accounting provide them with information? Give an example of the type of report each type of user might use.
Internal Users
Internal users are individuals within an organization who use financial information to make decisions, including managers, employees, and owners.
External Users
Individuals or organizations outside a company who use its financial statements for decision-making purposes, such as investors, creditors, and regulatory agencies.
Accounting Information
Financial data and reports generated from the accounting system of a business, used for decision-making and financial analysis.
- Differentiate between internal and external users of accounting information and the types of reports they utilize.
Verified Answer
External users of accounting information include customers, creditors, banks, and government entities. These users are not directly involved in managing or operating the business. The area of accounting that provides external users with information is called financial accounting. General-purpose financial statements are one type of financial accounting report that is distributed to external users.
Learning Objectives
- Differentiate between internal and external users of accounting information and the types of reports they utilize.
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