Chapter 1, Problem 3DQ

To determine

Accounting Information:

In accounting, the financial event and transaction are kept in books of accounts and this process is formally known as book keeping. The financial statement contains the profit and loss account, cash flows and balance sheet. The information contained in financial statement known as the accounting information. This information is important for external users as well as for the internal users.

External Users: External users are those who will not participate in the decision making of the company but they are interested in the affairs of the company. As the financial event occurs in the company, the effect of that event will directly impact the external users. As final accounts of the corporation are public to everyone means any one can see the financial statements of the company so those who see the financial statement for their own sake they are financial users.

To identify: Four kinds of external users and their use of accounting information.