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GRADE 12 2nd Week

The document outlines the users of accounting information, categorizing them into internal and external users. Internal users include investors, management, and employees who utilize financial information for decision-making and evaluating company performance. External users consist of financial institutions, government entities, and potential investors or creditors who assess the company's financial health for credit and investment decisions.

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michelle.c.antalan
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37 views15 pages

GRADE 12 2nd Week

The document outlines the users of accounting information, categorizing them into internal and external users. Internal users include investors, management, and employees who utilize financial information for decision-making and evaluating company performance. External users consist of financial institutions, government entities, and potential investors or creditors who assess the company's financial health for credit and investment decisions.

Uploaded by

michelle.c.antalan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

USERS OF

ACCOUNTING
INFORMATION
INTERNAL USERS
are the primary users of financial
information who are inside the
reporting entity and are directly
involved in managing the company’s
daily operations. They are the decision
makers who make the strategic and
operational decisions for the company.
3 INTERNAL
USERS
INVESTORS/OWNERS/
STOCKHOLDERS
These parties provide the financial
resources to keep the business going.
They decide whether to invest or not
depending on the estimate amount of
income on the investment. Upon
investment, they would want to know the
financial position or results of operation of
their business investment.
MANAGEMENT
Organizational managers use
financial information to set goals
for their companies. Managers
evaluate their progress towards
these goals and use financial data
as a guide for future management
actions.
EMPLOYEES
Although the employees are not
directly involved in the decision
making of the company, they are
nonetheless interested in the
financial information of the
company to determine if they have
a future in the company.
EXTERNAL USERS
are secondary users of financial
information who are parties outside
the company. They may not be
directly involved in the company’s
operations but their decisions may
significantly affect the business
entity.
3 EXTERNAL
USERS
FINANCIAL
INSTITUTIONS/CREDITORS
Before extending credit, financial
institutions use financial
information to determine the
capacity of the business
organization to pay its obligations
and their interests at the
appropriate time.
GOVERNMENT
Financial information is
important for tax purposes
and in checking of compliance
with Securities and Exchange
Commission (SEC)
requirements.
POTENTIAL
INVESTORS/CREDITORS
Before making an investment or extending
credit, potential investors or creditors may
not only be interested in the company’s
current financial position and results of
operations, but also in the company’s
financial history. This should give them the
assurance that their investment will yield a
reasonable rate of return or the credit
extended will be paid within a reasonable
period of time.
ACTIVITY
Instruction: The following are users of financial statements.
Identify if the users mentioned below are external or
internal. Write your answer on the blanks provided for.
1. Customers
2. Bureau of Internal Revenue
3. Labor unions
4. Factory manager
5. Vice-president of finance
6. Securities and Exchange Commission
7. Investors
8. Suppliers
9. Factory workers
10. A bank company

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