Explain internal and external users of accounting information by presenting the area of accounting that provides them with information. In your answers, also give an example of each type of user along with a report that each might use

Answer 1

Internal users of accounting information include managers and employees. The area of accounting that provides internal users with information is called managerial accounting or management accounting. An example of a report that might be used internally by managers or employees would be reports that include information about customers, prices and plans to expand the business.

External users of accounting information include customers, creditors, banks, and the government. These users are not directly involved in managing or operating the business. Financial reports about the profitability of a company's operations is important to banks and creditors when deciding to lend money to the company or extend credit.