How do Users Use Accounting Information?| Uses of Accounting Information.

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How do Users use Accounting Information? Or Uses of Accounting Information.

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How do Users use Accounting Information? Uses of Accounting Information.

We all know that there two types of users of accounting information.

1. Internal Users
2. External Users
Now we try to learn how they use accounting information?
Internal Users:

1. Owners:
The main purpose of the business is to make a profit. Owners are keen to know the profit rate on their invested money and the security information of their invested money.
They can get a good idea about this from the accounting information.

2. Management Authority:
There are different types of financial information needed to manage a business organization. Accounting information helps managers to prepare different types of plans and budgets.

3. Internal Auditor:
Internal auditors use various accounting information and take an important decision in the organization.

4. Accounting Department:
The Accounting Department also acts as an important user of accounting information. Based on this information, they make different decisions.

External Users
1. Government:
The government imposes various taxes directly and indirectly on the income, sales, etc. of the organization.
Accounting information helps the government to impose various types of taxes on the income of an organization.

2. Lenders:
The Business institution relies on lenders to collect additional money. The lenders want to check the financial statements of the company before making a loan.
They use accounting information for making their decision.

3. Investors:
Investors thoroughly examine the financial statements of an organization before investing in it, and make investment decisions based on the information of that company.

4. Consumers:
Consumers use accounting information to determine if consumer rights are protected. Consumers use this information to determine whether the company is quality and fair.

5. Researcher:
The financial statement of the institution is the image of the organization. Therefore, researchers use accounting information to help improve the quality of research in various fields.

Therefore, the usefulness of accounting information is very important to both internal and external users. All users, however, use accounting information from their location and where they need it.

I hope at the end of the video you have learnt How do Users use Accounting Information? Or Uses of Accounting Information.

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Where do we use accounting information?