The accounting process provides financial data for a broad range of individuals whose objectives in studying the data vary widely. Three primary users of accounting information were previously identified, internal users, external users, and government/IRS. Each group uses
accounting information differently and requires the information to be presented differently. Accounting supplies managers and owners with significant financial data that is useful for decision making. This type of accounting is generally referred to as managerial accounting. Some of the ways
internal users employ accounting information include the following: External UsersTypically called financial accounting, the record of a business’ financial history for use by external entities is used for many purposes. The external users of accounting information fall into six groups; each has different interests in the company and wants answers to unique questions. The groups and some of their possible questions are:
Some of the ways external users employ accounting information include the following:
General-purpose financial statements provide much of the information needed by external users of financial accounting. These financial statements are formal reports providing information on a company’s financial position, cash inflows and outflows, and the results of operations. Many companies publish these statements in annual reports, also known as a 10-K or a 10-Q (quarterly report). The annual report contains the independent auditor’s opinion as to the fairness of the financial statements, as well as information about the company’s activities, products, and plans. Typically, the best place to find these reports for a public company can be on their website under the Investor relations section. Financial statements used by external entities are prepared using generally accepted accounting principles, or GAAP. We will discuss the language of GAAP further in later sections. Government/IRSGovernment agencies that track and use taxes are interested in the financial story of a business. They want to know whether the business is paying taxes according to current tax laws. The language in which tax-related financial statements are prepared is called IRC or Internal Revenue Code. Tax preparation will be outside the scope of this course. Important Points to Remember
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11. Which of the following user groups is an internal user of accounting information for the XYZ Company Ltd? a. auditors from the Australian Taxation Office. *b. management of XYZ Company. c. creditors of XYZ Company. d. customers of XYZ Company. Answer: b Learning objective 1.5 – Identify the users of financial reports and describe users' information needs. Feedback: Managers are internal users of accounting information. 12. Which of the following users would not be considered an internal user of accounting data for a company? a. the chief executive officer of the company. b. the financial director of the company. *c. a creditor of the company. d. a salesperson employed by the company. Answer: c Learning objective 1.5 – Identify the users of financial reports and describe users' information needs. Feedback: Creditors are an external resource provider. 51.Which of the following wouldnotbe considered internal users of accounting data for a company?a.The president of a companyb.The controller of a companyc.Creditors of a companyd.Salesmen of the company1 -2 52.Which of the following is an external user of accounting information? Get answer to your question and much more 53.Which one of the following isnotan external user of accounting information? Get answer to your question and much more 54.Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accountingprocess?All of the following are services offered by public accountants except Get answer to your question and much more a.budgeting.b.auditing.c.tax planning.d.consulting. a56.Which list below best describes the major services performed by public accountants?57.Preparing tax returns and engaging in tax planning is performed by Get answer to your question and much more Get answer to your question and much more a58.A private accountant can perform many activities in a business organization but wouldnotwork in Get answer to your question and much more 1. Which of the following wouldnotbe considered an internal user of accounting data for theXYZ Company?a. President of the companyb. Production managerc. Merchandise inventory clerkd. President of the employees' labor union 2. Which of the following wouldnotbe considered an external user of accounting data for theXYZ Company? Get answer to your question and much more 3. Generally accepted accounting principles are Get answer to your question and much more We have textbook solutions for you!The document you are viewing contains questions related to this textbook. College Accounting, Chapters 1-27 Heintz/Parry Expert Verified 4. The basic accounting equation may be expressed as Get answer to your question and much more 5. Liabilitiesa. are future economic benefits.b. are existing debts and obligations.c. possess service potential.d. are things of value used by the business in its operation. 6. The basic accounting equationcannotbe restated as Get answer to your question and much more 7. The accounting equation for Goodboys Enterprises is as follows:Assets LiabilitiesStockholders' Equity$120,000 = $60,000 + $60,000If Goodboys purchases office equipment on account for $12,000, the accounting equation willchange toAssetsLiabilitiesStockholders' Equity Get answer to your question and much more 8. As of June 30, 2008, Houston Company has assets of $100,000 and stockholders' equity of$5,000. What are the liabilities for Houston Company as of June 30, 2008? Get answer to your question and much more 9. Creditsa. decrease both assets and liabilities.b. decrease assets and increase liabilities. c. increase bothassets and liabilities. d. increase assets and decrease liabilities.10. A debit to an asset account indicates a. an error. b. a credit was made to a liability account. c.a decrease in the asset.d. an increase in the asset. 11. An accountant has debited an asset account for $1,000 and credited a liability account for$500. What can be done to complete the recording of the transaction? Get answer to your question and much more Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document Which of the following is not considered an internal user of accounting data?Creditors use accounting information to determine whether the entity can pay its obligations or not. Creditors are the outsiders that lend money to the company. Therefore, creditors would not be considered internal users of accounting data for a company. Which of the following would not be considered an internal users of accounting data for a company Mcq?Answer choice c. External users are not involved in the day to day operations and are external to the organization. Examples of external users can include creditors and investors. Which of the following would be considered an internal users of accounting data for a company *?Internal 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. What are the 3 internal users of accounting?Examples of internal users are owners, managers, and employees. External users are people outside the business entity (organization) who use accounting information. Which of the following is not considered an external user of accounting data?An external user of accounting data is one that is not an employee or manager within the company and is not involved in the day to day operations. The CFO is considered an internal user. Economic planners, labor unions, and customers are all external users. Who are the external users of accounting data?External users are people outside the business entity (organization) who use accounting information. Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities. Which of the following is not an internal user of accounting data?Answer and Explanation: A c) creditor is not an internal user. Creditors are external users who rely on financial accounting rather than managerial accounting to make decisions. Which one of the following is not an example of external users?Answer and Explanation: Internal users are people inside the business. Examples include employees, management, and owners. External users are people outside the business. Examples include investors, government authorities, customers, suppliers, bankers, and regulatory agencies. Which of the following is an internal user of accounting data?Examples of internal users are owners, managers, and employees. External users are people outside the business entity (organization) who use accounting information. Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities.
Who are the internal users of accounts?Internal Users: Internal users are inside the business of the entity.. Example: managers, owners, directors, CEO, CFO etc.. External Users: These are outside the affairs of the entity.. Example: Creditors. Government, Shareholders etc.. Which of the following would not be considered an internal users of accounting data?Creditors are the outsiders that lend money to the company. Therefore, creditors would not be considered internal users of accounting data for a company.
Which of the following can be considered as an internal user *?Internal users refers to mangers who use accounting information in making decision related to the company's operation.
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Which of the following would be considered an internal user of accounting data?
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