USERS-OF-FINANCIAL-INFO_1227fffggggg06.pdf

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1. 1
ST
SEMESTER QUARTER 1 MODULE 1
1

2. Determinetheperiod
wheretheaccounting
developmentoccurred.
2

3. 3

4. LucaPacioliwrotethebook
entitled"SummadeArithmetica,
Geometria:Proportioniet
Proportionalita."
4

5. There is increased
dependence on digitalization
and smart technologies.
5

6. Thefirstworkableadding
machinewasinventedand
patented.
6

7. Tokensystemwasused
asevidenceoftransaction.
7

8. Duringthistime,
Accountabilitywasassured
bypublicexposureof
accountsonstone.
8

9. 9

10. •Thereisnoknownbusinessthat
isestablishedjusttotransactwith
itself.
•Everybusinessisinfluencedbya
certaininternalandexternal
factors.
10

11. •Internalpartiesarethosewhoare
directlyinvolvedintheoperations
ofthebusiness.
•Therearealsoparties,although
outsideofthecompany,whohave
stakeorinterestinthebusiness.
11

12. •Inordertobuildalasting
relationship,communicationiskey.
•Inbusinesscommunicating
accountinginformationtothese
differentpartiesempowersthemto
makebettereconomicdecisions.
12

13. 13

14. EXTERNAL USERS
•Externalusersareparties
outsideoftheorganizationbut
affectandareaffectedbythe
organization.
14

15. EXTERNAL USERS
•Theyarecommunicatedwith
accountinginformationusuallyin
theformoffinancialstatements.
15

16. EXTERNAL USERS
•Thepurposeoffinancial
statementsistocaterfortheneeds
ofsuchdiverseusersofaccounting
informationinordertoassistthem
inmakingsoundfinancialdecisions.16

17. 17

18. Customers
Theyarethemainsource
ofincomeofbusinesses
andtheyacquiregoodsand
servicesforafee.
18

19. Theyhaveinterestinthe
accountinginformationforassessingthe
financialpositionofabusiness,
especially,whentheyhavealongterm
involvementwith,asitenablesto
maintainasteadysourceofbusiness.
19

20. Creditors
Theyaretheprovidersof
additionalfundswhentheinitial
investmentofownersisexhausted
andlendresourcestobusinesses
usuallyintheformofmoney.
20

21. Creditorsareinterested
inaccountinginformation
becauseitenablesthemto
determinethecredit
worthinessofthebusiness.
21

22. Thecredittermsand
standardsaresetonthebasisof
thefinancialhealthofa
business,so,ithelpsthemto
analyzebyusingtheaccurate
informationaccordingly.
22

23. Potential Investors
Theyaretheprovidersofadditional
fundswhentheinitialinvestmentor
ownersisexhaustedandtheyinvest
resourcesinthebusinesshopingto
earndecentreturns.
23

24. Theyneedtheinformation
becausetheyareconcerned
withtheriskinherentin
investingandthereturns.
24

25. Sinceitisimportanttoassess
thefeasibilityofmaking
investmentsinthecompany,
theyneedtoanalyzebeforethey
provideanyfinancialresources
tothecompany.
25

26. Government
Thisisanexternaluserwhose
primaryroleistoregulate
businessesandstudiesfinancial
statementstodetermineamount
oftaxespayable.
26

27. Governmentwantsto
knowearningsorsalesfora
particularperiodforthe
purposeoftaxation.
27

28. Academe
Theyuseaccounting
informationprimarilyfor
academicpurposes.
28

29. Theacademeisnotconfinedin
theaccountancyfieldbutforother
fieldsofstudylikebankingand
finance,entrepreneurship,and
economicssimilarlymakeuseof
financialstatements.
29

30. General Public
Theyarethecitizensand
residentsofthecountry.Theyuse
financialstatementstogaugethe
conditionoftheeconomy.
30

31. General Public
Byanalyzingthefinancial
statementsofthecompanies,the
publiccanproperlyrespondto
thevariouseconomiccycles.
31

32. INTERNAL USERS
Theyrefertothemembersofa
company'smanagementandother
individualswhousefinancial
informationinrunningandmanaging
thebusiness.
32

33. INTERNAL USERS
Theyworkwithinthe
companyandmakedecisions
forthebusiness.
33

34. 34

35. Management
Themanagementmakes
decisionsforthecompanyandis
consideredasthebrainofthe
company.
35

36. Management
Themanagementmakes
decisionsforthecompanyandis
consideredasthebrainofthe
company.
36

37. Managementneedsthe
accountinginformationto
evaluatetheperformanceof
theorganizationandposition,
37

38. sothatthenecessarymeasures
maybetakentobring
improvementsintermsofbusiness
results.Besides,accounting
informationisusefultohelp
managersdotheirjobsbetter.
38

39. Employees
Theyarepersonsinthe
companyasidefrommanagers
andownerswhodonothave
authoritytoimplementdecisions.
39

40. Theyusetheaccountinginformation
tofindoutthefinancialhealth,amount
ofsalesandprofitabilityofbusinessto
determinetheirjobsecurity,the
possibilityoffutureremuneration,
retirementbenefits,andemployment
opportunities.
40

41. Owners (or Stockholders)
Theyaretheexistinginvestors
ofthecompanyandtheones
concernedmostlywiththeprofits
ofthecompany.
41

42. Ownersusetheaccounting
informationforanalyzingthe
viabilityandprofitabilityof
theirinvestments.
42

43. Accountinginformationenables
theownerstoassesstheabilityof
thebusinessorganizationtopay
dividends.Italsoleadsthemto
determineanyfuturecourseof
action.
43

44. Howtheseusersmakeuse
oftheaccountinginformation
willdependonthedecisions
theyhavetomake.
44

45. 45

46. 46
Type of
Users
Example of usersDecision/
Benefits from
accounting
information
CustomersClients, people
acquiring goods
or services of a
business for a
fee.
Whether or not to
build relationship
with the business

47. 47
Type of
Users
Example of usersDecision/ Benefits
from accounting
information
CreditorsBanks, lending
institutions,
wealthy
individuals and
sometimes the
government
Whether or not to
lend resources to the
business; try to see
the risks before
lending funds

48. 48
Type of
Users
Example of
users
Decision/ Benefits
from accounting
information
Potential
investors
Wealthy
individuals,
other
businesses
planning to
invest
Whether or not to
invest in the business,
primary concern is the
ability of the business
to provide acceptable
returns

49. 49
Type of UsersExample of
users
Decision/ Benefits from
accounting information
Government Different
government
agencies and
taxing
authorities
Oversees business
operations with the end
goal of improving the
economy, check the
accuracy of financial
statement to ensure
correct amount of taxes
payable

50. 50
Type of
Users
Example of usersDecision/ Benefits from
accounting information
Academ
e
Professors,
lecturers,
students and
researchers
Uses accounting
information in teaching
accountancy,
researches loopholes,
and possible
improvements in the
field

51. 51
Type of
Users
Example of usersDecision/ Benefits from
accounting information
General
public
Common
people not
connected
with the
company
Concerned with the
overall performance
of the economy, use
financial information
to estimate
economic
performance

52. 52
Type of UsersExample of usersDecision/ Benefits
from accounting
information
Management Board of
Directors, Top
Management,
middle-level
managers,
supervisors
Uses financial
information in
making
business
decision

53. 53
Type of
Users
Example of usersDecision/ Benefits
from accounting
information
EmployeesLaborers,
Field workers,
non-
managerial
employees
Check if the
business is
profitable enough
to provide
compensation and
other benefits

54. 54
Type of UsersExample of
users
Decision/ Benefits
from accounting
information
Owners or
stockholders
Founders of the
company,
owners,
stockholders,
partners,
proprietors
Concerned with the
returns earned from
their investments,
owners taking active
roles in the
operations of the
business.

55. Exercise :
Identifytheuserthatis
beingdescribed.
55

56. They use accounting information
for studying the field of accountancy
and to be able to produce future
accountants and business
managers.
56

57. They study the financial
records of the company to
determine the taxes payable.
57

58. They check whether the
company is profitable enough to
pay salaries and compensation.
58

59. They look at financial
statements so they will know how
much return on investment they
have earned from the company.
59

60. They primarily use financial
reports in order to respond
accordingly to the issues of the
company.
60

61. 61

62. 62

63. 63

64. 64

65. Assessment:
True or False?
65

66. Financial Statements are
beneficial to a wide range
of internal and external
users.
66

67. Investors acquire goods
and services for a fee.
67

68. Creditors are less
concerned with the riskiness
of a company than the
customers.
68

69. The difference between
potential and existing investors
is the fact that potential
investors have already taken
the risk.
69

70. External users include
creditors, customers, and
general public.
70

71. Unlike creditors who are
assured to earn the interest
and fees, investors may win or
lose in their investment.
71

72. Management includes Top
management, Supervisors,
field workers, and board of
directors.
72

73. The academe is an internal
user of accounting information
while government is an
external user.
73

74. Accounting information is not
useful to any user if it is
communicated in an untimely
manner.
74

75. The primary reason why
employees need accounting
information is to enable them to
perform better for the benefit of
the company.
75