users of accounting information

Question 1

these are the people who work outside of the organization. they are not directly involved in its operations but hold some financial interest

Answer 1

external users

Question 2

_______ check a company’s financial information to get a hold of its financial activities and status that would be the basis if it would be a good investment for them or not.

Answer 2

investors

Question 3

_______ check a company’s financial health, which is provided by the financial statements, to ensure that they are able to pay the agreed money and/or repay its debt.

Answer 3

creditors

Question 4

_______ use financial information of a business to know how much that business earns in order for them to assess its tax liabilities.

Answer 4

government and tax authorities

Question 5

_______ check a company’s financial information to know if it is in accordance with the rules and regulations to ensure the security of the stakeholders’ interests.

Answer 5

regulatory agencies

Question 6

_______ check a company (with a similar business as theirs)’s financial information to accumulate and improve areas where they are lacking, and develop products and strategies to accommodate competition.

Answer 6

competitors

Question 7

_______ use financial information to assess the company’s means to produce good quality products or services consistently for a long period of time. Through this, they will be aware if a given price is reasonable or not.

Answer 7

customers and consumers

Question 8

_______ access organizations’ financial information to see whether it is needed or not to create changes with the existing laws for the aligning of the economic changes.

Answer 8

lawmakers and economic planners

Question 9

these are the people working within the organization who are directly involved in the business operations.

Answer 9

internal users

Question 10

_______ depend on financial information to determine the profitability and longevity of their business and to an eye on the overall well-being of the business, and whether to continue, improve or drop it.

Answer 10

owners

Question 11

_______ use financial information in carefully planning for the improvement of the business, allowing them to identify the areas which require more attention and procedures that need to be checked, and to assess the performance of the business in their guidance.

Answer 11

managers

Question 12

_______ make use of financial statements because it informs them about their payroll– the increase in their salaries, incentives, and wages and payment of bonus depending on the size of the profit earned by the business.

Answer 12

employees and trade unions

Question 13

enumerate the types of financial information needed by external users

Answer 13

statement of comprehensive income (income statement)
statement of retained earnings
statement of financial information (balance sheet)
statement of cash flows

Question 14

enumerate the types of information needed by internal users

Answer 14

audited statements
income tax returns
purchases and costs reports

Question 15

these are validated financial statements which verify the accuracy of data presented

Answer 15

audited statements

Question 16

the information from this allows the internal users to know if proper payment of taxes are secured by the company and examined by the BIR, which lets them know that they do not have any pending tax obligations.

Answer 16

income tax returns

Question 17

this allows internal users to easily track a compilation of every cost incurred business operations which are used as basis in calculating the profits and losses of a company within a time period.

Answer 17

purchase and costs reports