Those who work in the financial department of a business are concerned with planning the distribution of the business’ assets. How do finance and accounting work together? Managerial accounting provides detailed financial and nonfinancial information for internal users who use the information for decision making, planning, and control purposes. How does management accounting serve both external and internal users?įinancial accounting provides historical financial information for external users in accordance with U.S. They need accounting information to assess the financial performance and position and to have a reasonable assurance that the business to whom they are going to lend money would be able to return the principal amount as well as pay interest there on. Why do external users need accounting information? Which external user benefits the most from accounting information?īanks and Financial companies are the external users of accounting information which is most interested in knowing the long term solvency position of the firm. There are three basic financial statements that we will study in this course. Which of the following is an external user of accounting data?Įxternal users of financial information may include the following: owners, creditors, potential investors, labor unions, governmental agencies, suppliers, customers, trade associations, and the general public. 14 How do finance and accounting work together?.13 How does management accounting serve both external and internal users?.12 Why do external users need accounting information?.11 Which external user benefits the most from accounting information?.

10 Is a creditor an internal or external user?.

9 What are included in a complete accounting reports for external and internal use?.

8 Which of the following user groups require the most detailed financial information?.

7 Why do internal users need financial data?.

6 Which are the financial statements most frequently provided to external users?.

5 Which of the following is an external user of a business’s financial information?.

3 Which of the following external groups uses accounting information to determine whether the company can pay its obligations?.

2 Which of the following is not an internal user of accounting data?.

1 Which of the following is an external user of accounting data?.

External users of financial statements