Hi! And welcome back, again I am Mr Lucero D. Trangia Jr, one of the BTEC 10 Teachers.

Today, I am
about to discuss the accounting information and how it is being consumed, if you are ready, then let us
start. First question, what is accounting information? Accounting information is the data about a
business entity's transactions. From buying inventory and machinery to entering into long-term building
contracts, the events that occur in business operations almost always translate into accounting
information. This means that all kinds of business transactions, from the biggest down to the smallest
unit of business transactions, are what we called accounting information.

Each accounting information is being consumed differently by a group of people, and each group has its
own or unique way to consume accounting information. They are classified into two broad types –
internal and external users.

Let us begin with the internal users, they are referred to the management of the business, managers per
se. They are the ones behind the supervision of the company. The type of accounting information they
are consuming is called Managerial accounting. They need accounting information for planning and
controlling the business operations. They keep track of records so that it can evaluate its own
performance.

Next, we have external users. External users are further classified into two groups – those with a direct
interest and with indirect interest. The first external users with direct interest is/are the owner/s and
prospective owners of the business. The type of accounting information they look into is called financial
accounting. They rely on accounting information to decide to retain, sell, or give-up their financial
investment in the business. Another, external users of accounting information which has a direct
interest is/are the creditor/s of the firm. Creditor/s look into financial accounting if they could extend
credit to the business. They rely on the financial statement to determine if the business is in good
condition and could settle their economic obligations or solvency.

Subsequently, there are a group of people who are under external users with indirect interest, one of
which is the government agencies. The type of accounting that they are interested in is called tax
accounting. The government is concerned about the results of operations of any business enterprise for
planning, monitoring, and control purposes. The Bureau of Internal Revenue is in charge of tax collection
upon reviewing the financial condition of the business. Regulatory agencies like Bangko Sentral ng
Pilipinas (Central Bank of the Philippines), Securities and Exchange Commission are some of the
government agencies that review and evaluate the financial statements of a company.

Succeeding, the labour unions. A trade/labour union is an association of workers forming a legal unit or
legal personhood, usually called a "bargaining unit", which acts as bargaining agent and legal
representative for a group of employees in all matters of law or right arising from or in the
administration of a collective agreement. They rely on the company's financial statements in negotiating
for higher monetary and non-wage benefits. Here is an example that depicts a labour union.

Also, the employees. They are a group of people working in a specific business firm and form group to
advance their cause, among other purposes.

Correspondingly, the customers of the firm. They are the ones patronizing the products and services
being sold and offered by the company. Customers are interested in a company's financial strength as it
indicates its ability to honour product warranties and to provide technical & maintenance support to
them whenever needed.

Lastly, the general public. They are the concerned individual who checks if the company is providing
useful products and gainful employment for the citizens. Besides, from time to time, they monitor the
company's operations and determine if they are causing any severe environmental hazards.

That marks the end of our lesson, if you have any questions or clarification about this topic, you can just
click the reply and type in questions and clarifications. Thank you very much for listening and have a
beautiful day.