List four important users of financial accounting and describe the use that each user would make of the information.
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Accounting and finance play an existential role in the management of any business. In the words of John Nessel, president of the Restaurant Resource Group, “If you can’t count it, you can’t manage it.” He means that companies operate on money, and if you don’t control that money, you don’t control your business. By properly accounting for your company’s income and expenses, you can manage the flow of money and thereby direct the course of your business (Petryni, 2018).
Accounting is the systematic recording and analysis of financial transactions. Accounting methods are used to economic cash flows but, not to effect change in cash flows. Accounting is the process of gathering and communicating financial information. Information is in the form of a financial statement. These statements describe the terms of economic resources under management. Accounting involves bookkeeping and auditing. Modern accounting authorities use a standard set of rules for reporting financial information. Modern accounting standards refer to the Generally Accepted Accounting Principles (Bell, 2017).
Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to the financial resources of the enterprise.