FABM1: Users of Accounting Information INTERNAL & EXTERNAL. BAKIT BA NILA KAILANGAN ANG FS??
Summary
TLDRThis script discusses the importance of accounting information for both internal and external users of a business. Internal users, such as managers and supervisors, rely on this data to manage and operate the business effectively. External users, including investors, creditors, and regulatory authorities, use financial statements to assess the company's performance, creditworthiness, and compliance with legal standards. The script highlights the crucial role of accounting in decision-making and strategic planning for all stakeholders involved.
Takeaways
- đ Internal users of accounting information are individuals within the organization who are directly involved in managing and operating the business.
- đ Internal users, also known as primary users, include marketing managers, supervisors, finance directors, company officers, and owners.
- đą The term 'internal users' refers to those who are directly affected by the results of the financial statements within the organization.
- đ External users are individuals or organizations outside the company who use financial information for various purposes, such as evaluating the business's profitability and assets.
- đŒ External users include owners, investors, creditors, tax authorities, customers, suppliers, and regulatory authorities.
- đŒ Creditors and suppliers need accounting information to assess the creditworthiness and integrity of the organization.
- đ Investors use financial statements to evaluate the feasibility of investing in a company and to examine its performance and financial position.
- đŠ Tax authorities, such as the Bureau of Internal Revenue, verify the accuracy of financial data to ensure the credibility of tax returns filed by businesses.
- đ ïž Suppliers evaluate the financial information of their business partners to ensure a stable supply chain and justify pricing decisions.
- đïž Regulatory bodies, such as the Securities and Exchange Commission and the Department of Trade and Industry, supervise businesses to ensure compliance with legal requirements.
Q & A
Who are considered internal users of accounting information?
-Internal users are individuals within the organization such as marketing managers, supervisors, finance directors, company officers, and owners who are directly involved in managing and operating the business.
What is the primary role of internal users in relation to accounting information?
-Internal users, also known as primary users, are responsible for planning, organizing, and running the business, utilizing accounting information to make informed decisions about the operation and management of the company.
What are the main reasons external users need financial information?
-External users require financial information to assess the profit or income, resources or assets, and liabilities of the business for various purposes such as making investment decisions, evaluating the creditworthiness of the organization, and ensuring compliance with tax regulations.
How do owners use financial information for their business?
-Owners use financial information to consider additional investments, expand the business, borrow funds for expansion plans, and to understand the income or earnings for a given period.
Why is accounting information important for management to analyze the organization's performance?
-Accounting information helps management to analyze the organization's performance and financial position, allowing them to take appropriate measures to improve company results and ensure the sufficiency of cash for operations and dividend payments to stockholders.
What are some examples of external users of a company's financial statements?
-Examples of external users include creditors, tax authorities, investors, customers, suppliers, regulatory authorities such as the Securities and Exchange Commission, and government agencies like the Bureau of Internal Revenue.
How do creditors use a company's financial statements?
-Creditors use financial statements to determine the credit integrity and creditworthiness of the organization, which helps them decide on credit terms and the extension of loans.
What is the role of the Bureau of Internal Revenue in relation to a company's financial data?
-The Bureau of Internal Revenue verifies the accuracy of financial data to ensure the credibility of tax returns filed by the business and to ensure compliance with tax regulations.
Why is the financial information of suppliers important for a company?
-A company evaluates the financial information of its suppliers to maintain a stable source of supply in the long term and to justify pricing decisions based on the supplier's financial stability.
What are some of the regulatory bodies that may require access to a company's financial statements?
-Regulatory bodies such as the Securities and Exchange Commission, the Department of Trade and Industry, and the Department of Labor and Employment may require access to a company's financial statements to supervise businesses and ensure compliance with legal requirements.
What is the significance of financial statements for different types of business entities such as corporations, partnerships, and proprietorships?
-Financial statements are significant for all types of business entities as they provide a comprehensive view of the financial health and performance of the business, which is crucial for decision-making, compliance, and external evaluations.
Outlines
đ Internal Users of Accounting Information
The first paragraph introduces the concept of accounting information and its primary users within an organization. It defines internal users as individuals who are directly involved in the management and operation of the business, such as marketing managers, supervisors, finance directors, company officers, and owners. These users are crucial as they rely on accounting information to make decisions that impact the business's performance and financial health. The paragraph also highlights the importance of financial statements for internal users to analyze the organization's performance, assess the sufficiency of cash for dividends, and make informed pricing decisions.
đ External Users and Their Dependence on Accounting Information
The second paragraph discusses the role of external users of accounting information, which includes individuals or organizations outside the company. It lists various types of external users such as creditors, tax authorities, investors, customers, and regulatory authorities. These users utilize financial information to assess the creditworthiness of the organization, verify the accuracy of tax returns, evaluate investment opportunities, and ensure the stability of supply chains. The paragraph also mentions the importance of financial statements for regulatory bodies like the Securities and Exchange Commission and the Department of Trade and Industry, which supervise businesses to ensure compliance with legal requirements.
Mindmap
Keywords
đĄAccountants
đĄInternal Users
đĄPrimary Users
đĄExternal Users
đĄFinancial Information
đĄFinancial Statements
đĄCreditworthiness
đĄInvestors
đĄRegulatory Authorities
đĄSupervisors
đĄManagement
Highlights
Accounting information is crucial for individuals within an organization who are involved in planning, organizing, and running the business.
Internal users, also known as primary users, are directly involved in managing and operating the business.
Examples of internal users include marketing managers, supervisors, finance directors, company officers, and owners.
External users are individuals or organizations outside the company who use financial information for various purposes.
Financial information helps external users to understand the profit, income, resources, assets, and liabilities of a business.
Owners and investors use financial information for considerations regarding additional investments and expansion plans.
Management uses accounting information to analyze the organization's performance and take measures to improve company results.
The sufficiency of cash for paying dividends to stockholders and pricing decisions is a key reason for needing accounting information.
Creditors, tax authorities, investors, customers, and regulatory authorities are examples of external users who need accounting information.
Creditors use accounting information to determine the creditworthiness and credit terms of an organization.
The Bureau of Internal Revenue is a government agency that verifies the accuracy of financial data for tax return credibility.
Investors evaluate financial statements to assess the feasibility of investing in a company.
Suppliers use financial information to evaluate the financial stability of their customers for long-term business relationships.
Regulatory bodies such as the Securities and Exchange Commission and the Department of Trade and Industry supervise businesses for legal compliance.
The Department of Labor and Employment is involved in ensuring businesses meet labor laws and regulations.
Accounting information is essential for businesses of all types, including corporations, partnerships, proprietorships, and joint ventures.
Transcripts
so good morning accountants and managers
accounting information
definition individuals inside the
organization who plan
organize and run the business so they
are directly involved in managing and
operating the business
internal users are also called primary
users of accounting information
and some of these users are the
marketing managers supervisors finance
directors
company officers and owners so from the
term itself
internal users so young and associated
business or parties organization
so directly affected when it comes to
the result of
the financial statement okay
so you my example yeah enumerate
so your external users naman so
individuals or organizations outside
the company who are not involved in the
operation of
the business so in this apartment
organization
business
management and employees
so they use financial information to
know the profit or income
for the period resources or assets of
the business
so liabilities of the business are
needed by the owners
they also use financial information in
considerations regarding
additional investment expanding the
business and borrowing funds to support
any expansion plans so
to know the income or earnings for the
period
sales available cash and production
costs
are the reasons why the management needs
the accounting information
so union highlight number letter they
also analyze the organization's
performance and position
and take appropriate measures to improve
the company results
sufficiency of cash to pay dividends of
stockholders as well as the
pricing decisions okay so young mean
concern and management
pan obama papa baba young
bargaining agreement or
financial statements
external users outside
the business premises or organization a
young
ma creditors tax authorities investors
customers assam and regulatory
authorities
creditors suppliers nothing
so they are users who need accounting
information to determine the credit
integrity
worthiness of the organization and
credit terms
suppliers
bureau of internal revenue so a new
government agency that verifies the
accuracy of financial data
to ensure the credibility of the tax
returns filed by the business
okay so
okay
to evaluate and examine the feasibility
of investing in a
company
statement performance and financial
position
invest
okay so users will evaluate the
financial information of its supplier
to keep stable source of supply in the
long term and ethiopia
and justify pricing
those financial statements
regulatory bodies or yamaha government
agencies
securities and exchange commission
corporation
so dti or department of trade and
industry in a man capacitor
proprietorship and partnership
tapos department of labor and employment
so an establishment to supervise
businesses in a complex among legal
requirements
okay
and managers
see you next time
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