What is the purpose of producing accounting information and how each user has its own needs??
The primary purpose of accounting is to provide information useful for making decisions. Internal users: * Management – obtain financial information in a way that best suits its needs, (i.e. ways to cut costs, maximize profit, etc.). * Board of Directors – information to assist in determination of current executive positions External users: * IRS – requires the information be presented in a very specific manner. * Stockholders and potentional stockholders – information that will aid in decision continue to hold the stock, sell the stock, or purchase the stock. * Bondholders, bankers & other creditors – information that will aid in decision of whether or not to purchase the bond. Bank needs information that will help it determine the company’s ability to repay the loan and interest. * Employee (can also be considered internal) – information that will aid in decision to continue working at the company or look for employment elsewhere. * Supplier – information to aid in decision to contin
