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Introduction to Accounting
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Can serve as a reference for beginners in accounting
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Users of Accounting InformationInternal users of accounting information are those individuals inside a
company who plan, organize, and run the business. These users are directly
involved in managing and operating the business. These include marketing
managers, production supervisors, finance directors, company officers and
owners.
o Management
Information need: income/earnings for the period, sales, available cash, production
cost
Decisions supported: analyze the organization's performance and position and take
appropriate measures to improve the company results, sufficiency of cash to pay
dividends to stockholders; pricing decisions
o Employees
Information need: profit for the period, salaries paid to employees
Decisions supported: job security, consider staying in the employ of the company or
look for other employment opportunities
o Owners
Information need: profit or income for the period, resources or assets of the business,
liabilities of the business
Decisions supported: considerations regarding additional investment, expanding the
business, borrowing funds to support any expansion plans.
Accounting information is presented to internal users usually in the
form of management accounts, budgets, forecasts and financial statements.
This information will support whatever decision of the internal users.
External users are individuals and organizations outside a company who
want financial information about the company. These users are not directly
involved in managing and operating the business. The two most common
types of external users are potential investors and creditors. Potential
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