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Primary Users: Financial Accounting

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Primary Users: Financial Accounting
Primary users
Financial accounting : the primary users of financial accounting are the external users, shareholders, investors , creditors, lenders and government. Share holders are using financial information to know about their investment e.g how the investment is running, what is the organization profit and what is the value of the organization. Investors use financial information to know in which organization they should invest and to look how was the organsation performance in the past so that help them to decide whether to invest or not. Creditors and lenders use financial information to see how is the financial position of the company and dose it able to meet its obligations so it help them to decide whether to give the organization loan or not. Government required financial information to know what is the profit of the company so that it can impose the taxation on it.
Management accounting: the users of management accounting is the internal users, managers and employees. for use by managers in planning, performance evaluation, and operational control:
- Planning: For example, deciding what products to make, and where and when to make them. Determining the materials, labor, and other resources that are needed to achieve desired output.
- Performance evaluation: Evaluating the profitability of individual products and product lines. Determining the relative contribution of different managers and different parts of the organization.
- Operational control: For example, knowing how much work-in-process is on the factory floor, and at what stages of completion, to assist the line manager in identifying bottlenecks and maintaining a smooth flow of production. Type of reports
There are to types of reports from accounting information, Internal reports and External reports. * External reports are reports prepared by financial accounting, used by external parties who have an economic interest in the firm, it contains Balance sheet, Income statement

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