Fundamentals of Accountancy, Business and Management 1

FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND
MANAGEMENT 1
Name of Learner: ________________________________ Grade Level: _______________
Section: ________________________________________ Date: _____________________
LEARNING ACTIVITY SHEET External and Internal Users of

Financial Information
Background Information for Learners:
Accounting is called the language of business communicates accounting

information to help many types of users. The user’s need for financial information depend
upon the type of decisions to be made.
Financial reports supply the information to the internal and external users in order
for them to make decisions connected to the business.
Learning Competency with code:

At the end of the activity the students should be able to:
1. Define external users and gives examples (ABM_FABM11-IIIa-7)
2. Define internal users and give examples (ABM_FABM11-IIIa-8)
Procedure:
Activity I
Directions: Classify each of the following as either external user (E), or internal user (I).
__________1. Creditor
__________2.Employees
__________3. Academe
__________4.Government
__________5.Stockholder
__________6.Customer/Client
__________7.Potential Investor
__________8. Management
__________9.General Public
__________10.Owners
Activity II
Directions: Choose the correct answer from the options given below. Circle the letter of
the best answer.
1. Which of the following is NOT considered internal user of accounting
information?
a. Owners of the business
b. Suppliers
c. Senior partners of audit firm
d. Field workers
2. Raymond is a professor in accountancy in the BS Accountancy program of

the University of Sto. Tomas. He is also a stockholder of Northwing Co. In the
point of view of Northwing Co., Raymond is an a. Internal User
b. External user
c. a & b
d. none of the above
3. Which of the following is NOT considered an external user of the

accounting information? a. BIR
b. Customers
c. Production supervisor
d. A student of accountancy
4. The government is also an interested outside party that analyzes a

company’s financial statements. Which of the following is NOT performed by the
government?
a. The government encourages or prohibits certain business activities
depending on their effect on the economy.
b. The government examines financial statements to help companies in
formulate business decisions
c. The government assesses the taxes payable by companies through the
analysis of financial statements.
d. The government is a regulatory body that oversees all business.
5. Management consists of the following

a. Top management, supervisors, field workers, board of directors
b. Board of directors, supervisors, top management, laborers
c. Top management, board of directors, middle managers, supervisors
d. Owners, top management, middle managers, supervisors, laborers
6. The group of users of accounting information invested resources to the

company with the hope of earning acceptable returns. a. Government
b. Potential investors
c. Creditors
d. Owners or Stockholders
7. Which of the following does NOT fall under the category of customer?
a. Francis, a loyal gamer in Angel Computer shop.
b. Jeff, a client of Optical Shop
c. Jose, a regular purchase of soft drink in Lyn’s Sari-Sari Store.
d. Juan, an individual collecting monthly payment from Jaja Co.
8. Which of the following information in a company’s financial statements

concerns creditors?
a. Amount of profit
b. Borrowings of a company
c. Assets of a company
d. All of the above
9. In what aspect do creditors and potential investors differ?

a. Creditors are wary of the riskiness of a company
b. Creditors are exposed to more risk than investors
c. Wealthy individuals can only invest not lend to a company.
d. Creditors receive fived amount of fee in their loans to the business.
10. Why do costumers look at the companies’ financial statements?

a. To help members of academe to gather data for educational purpose
b. To decide whether or not they will lend resources to the company.
c. To see if it will be beneficial to build a long-term relationship with the
company
d. To estimate potential returns if he or she plans to transact with company
Activity III
Directions: Search up, down, forward, backward, and on diagonal to find the hidden words.
Find the following words:
• Government
• Management
• Employees
• Costumers
• Banks
• Money
• Creditors
• Stockholders
WORD SEARCH
S J Q L M O V L T E T T
Y R U A R P A P U G N E
C R E C B C G J B E E M
M U J D A B F P M P M P
X F S D L G Y E J R N L
L W E T F O G L J M R O
N M I P O A H P E S E Y
E Q E M N M Y K U S V E
E A W A T J E E C U O E
Y R M N R K Y R N O G S
S R E N W O Z B S O T J
Activity IV
Directions: Supply the missing information.
Types of User Definition Example of Users Benefits from

Accounting
Information
Customers Main source of 1. Whether or not to

income of businesses build relationships
with businesses
Creditors Provides additional Banks, lending 2.

funds when the initial institution,
investment of the government
owners is exhausted
3. An external user BIR Oversees business,
whose primary role is DOLE Check the accuracy
to regulate, analyze of financial
DTI
financial statements statements
to determine of taxes
payable
Management Employees that make Board of Directors, 4.

decisions for the top management,
company middle-level
manager, supervisors
Owners Existing investor of 5. Mainly concerned

the company; with returns earned
concerned mostly
with profits of the
company
Employees Persons in the Laborers, Field 6.

company aside from workers, non-
managers and owners managerial
or stockholders employees
Activity V: Arrange & Identify
Directions: Arrange the jumbled words of the different users of financial information in the
box, after which identify each arranged word whether it is internal (I) or external users of
financial information. Write your answer on the space provided.
1.NTEMRNEVGO 4.SUCMOTRES 7.KSNAB
2.RECSRTOID 5. AGENAMEMTN 8.MEEDCAA
3.LOPEMEEY 6.WORSEN 9.SRSDHOLAKCOT
10.RSIEPPLUS
1.___________________________________
2.___________________________________
3.__________________________________
4.__________________________________
5.__________________________________
6.__________________________________
7.__________________________________
8.__________________________________
9.__________________________________
10._________________________________
Activity V:
Directions: Answer what is being ask. Write your answer on the space provided.
1. Name the two broad categories of users of financial information and give
three examples each.
__________________________________________________________________
___________________________________________________________________
__________________________________________
2. What kind of information do users need that can be answered by financial
statements?
___________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Guide Questions:
1. Who are the external users?
2. Who are the internal users?
3. What are the benefits do external and internal users get from the financial
information?
Rubrics for Scoring

Points
10 There is a clear, well focused idea that stands out and supported by detailed
information
8 Main idea is clear but supporting information is general
6 Main idea is somewhat clear. But there is a need for more supporting
information
4 The main idea is not clear. There is a seemingly random collection of
information
Reflection:
Write your brief description of your experiences by answering the following questions.
1. How do you find the activity?
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
________________________________
___________________________________________________________________
___________________________________________________________________
2. What did you like most about the activity, and why?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________
3. What was the most challenging about the activity?
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
________________________________

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FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND

LEARNING ACTIVITY SHEET External and Internal Users of

Background Information for Learners:

Accounting is called the language of business communicates accounting

Learning Competency with code:

2. Raymond is a professor in accountancy in the BS Accountancy program of

3. Which of the following is NOT considered an external user of the

4. The government is also an interested outside party that analyzes a

5. Management consists of the following

6. The group of users of accounting information invested resources to the

8. Which of the following information in a company’s financial statements

9. In what aspect do creditors and potential investors differ?

10. Why do costumers look at the companies’ financial statements?

Directions: Supply the missing information.

Types of User Definition Example of Users Benefits from

Customers Main source of 1. Whether or not to

Creditors Provides additional Banks, lending 2.

Management Employees that make Board of Directors, 4.

Owners Existing investor of 5. Mainly concerned

Employees Persons in the Laborers, Field 6.

Rubrics for Scoring

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