Question

Explain why the following stakeholders use accounting information.

a. Creditors

b. Debtors

c. Employees

d. Analysts

e. Public

Answer 1

a. Creditors are those persons to whom amount is due. These persons need accounting information to ensure that their money will be repaid to them timely.

b. Debtors are those persons from whom amount is tobe received. They are also called customers. Debtors also require accounting information so that they can know about credit worthiness of business.

c. Employees are the part of internal organization. They require accounting information to ensure financial health and profitability so that their job security can be assured.
d. Analyst requires accounting information so that they can give review on the financial position of the business.

e. Public requires accounting information because they need to take decision whether to invest in the business or not.