Primary Users: Financial Accounting

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Primary users
Financial accounting : the primary users of financial accounting are the external users, shareholders, investors , creditors, lenders and government. Share holders are using financial information to know about their investment e.g how the investment is running, what is the organization profit and what is the value of the organization. Investors use financial information to know in which organization they should invest and to look how was the organsation performance in the past so that help them to decide whether to invest or not. Creditors and lenders use financial information to see how is the financial position of the company and dose it able to meet its obligations so it help them to decide whether to give the
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So financial accounting reports are external reports which useful for the external users as mentioned above on how each user use these financial information. * Internal reports are reports prepared by management accounting, used by internal users who is managing, organizing, planning and controlling the company.
Planning:
Identify objectives the company wants to accomplish which will add value to the company and increase profits, Discuss ways to accomplish the objectives and Prepare budgets to accomplish the profit objective.
Controlling:
Make sure the plans are being followed and objectives are accomplished, Performance reporting – compare actual results to the budget and Implement changes when objectives and goals are not being accomplished.
Decision Making: Use all information provided to make good business decisions
Focuses
Financial accounts concentrate on the business as a whole rather than analysing the component parts of the business. For example, sales are aggregated to provide a figure for total sales rather than publish a detailed analysis of sales by product. That mean financial accounting dose not look in details for each transaction and figure it just provide the figure of total amount.
Whereby Management accounts focuses on specific areas of a business'
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