Author Question: Discuss internal and external users of accounting information. What areas of accounting provide them ... (Read 141 times)

moongchi · **on:** Jul 5, 2018

Discuss internal and external users of accounting information. What areas of accounting provide them withinformation? Give an example of the type of report each type of user might use.

Question 2

Legal authority to expend resources is adopted by a city council in the budgeting process. These legal authorizations are called

A. Appropriations.
B. Authorizations.
C. Encumbrances.
D. Expenditures.

Ksanderson1296 · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Internal users of accounting information include managers and employees. Thearea of accounting that provides internal users with information is calledmanagerial accounting or management accounting. An example of a report thatmight be used internally is a customer profitability report.

External users of accounting information include customers, creditors, banks, andgovernment entities. These users are not directly involved in managing oroperating the business. The area of accounting that provides external users withinformation is called financial accounting. General-purpose financial statementsare one type of financial accounting report that is distributed to external users.

Answer to Question 2

A