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The accounting environment

Use of accounting information

7.1 Use of accounting information

The accounting system of a business records and summarises accounting
transactions so that useful information can be prepared for managers and others.
Managers need accounting information to help them to manage and control the
business (management accounting) and to prepare financial statements for external
users (financial accounting). Normally financial accounting consists of preparing
financial statements for external users.

Accounting
consists of
two elements:

Recording Summarising

Management Financial
accounts statements

Statement of
Statement of
cash flows changes in
equity

Statement of
Statement of
profit or loss financial
position

Notes

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