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Classify the categories of internal and external users and specify their objectives and consequent informational requirements.

AccountancyClass 11CBSEAnswered 23 Jun 2026
Answer
NameInternal/external userObjectives for participating in businessAccounting information requirements
Current OwnerInternalTo make investment in the business and wealth growLikes to know extent of profit in the last accounting period, current position of the assets/liabilities of the business
ManagerInternalFor a career. They essentially act as the agent of ownersAccounting information in the form of financial statements is like their report card and they are interested in information about both profits and financial position.
GovernmentExternal Its role is regulatory and tries to lay down the rules in the best public interestIts concerns are that the rights stakeholders are protected, since the government levies taxes on the business, they are interested in information about profitability in particular besides lot of other information.
Prospective ownerExternalHe is expecting to make investments in the business with a view to make his investment and wealth growHe is interested in information about past profits and financial position as indicative of likely future performance.
BankExternalBank is interested in safety of the principal as well as the periodic return Bank is interested in adequacy of profits only as an assurance of the return of principal and interest back in time. Bank is equally concerned about the form in which the assets are held by the business. When more assets are held in cash or near cash form, the aspect is known as liquidity

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