Management needs accounting information in

(1) selecting out of alternative proposals;

(2) controlling acquisition and maintenance of inventories (stock) cash

receipts and payments;

(3) planning or budgeting for the future

(4) appraising the performance and

(5) devising remedial measures for the deviations of the actual results from
the budgeted targets.

Owners:

Although owners initiate in contributing fund to the business yet they are the
last to receive their claim on equity's return on their investment. This is true
not only in repaying but also in rewarding their capital. After meeting all the
charges including employees' salaries and lender's interest profit if any can
be distributed as a reward on capital. Naturally, the owners are interested in
the safety of their capital as also for a reasonable return thereon, which rest
on the concern' s stability and prosperity. Accounting reports (annual) not
only appraise the past performance but also assist in assessing future
prospects of the entity. Such information is also very important for would-be-
owners.

Creditors:

May be short-term viz, suppliers of goods, lenders of temporary advance or

long-terms viz. mortgages, debenture holders etc. Although both are
interested in the stability and earnings of the debtor firm yet the former
specially looks to its short-term solvency i.e. liquidity whereas the latter is
interested in long-term solvency of the firm.

Government:

Many products now-a-days are subject to excise-duty and sales Lax. Also the
government regulates the prices of essential goods e.g.. drugs, vegetables,
oil etc. So the Government is interested to know the costing information to
administer excise duties and to regulate the prices of products. Government
is also interested in the accounting information on the profits for income tax
purposes.

Employees:

Steady employment and stability of business go together. Again trade unions

are interested in sharing the profit of the firm in the form of bonus. Therefore,
the employees are naturally interested in the accounting information
provided by the annual accounting reports.

Consumers:

Price-increase is disfavored in almost all the quarters. Accordingly, a producer

endeavors to reduce his product cost as also its selling price. Recently
consumer protection associations have been formed to exercise control on
the business and industry and also to make them aware of the "Social
responsibility" towards society. Thus consumers also need accounting
information.

Researchers:

The financial statements, being a mirror of business conditions are of

inestimable value for research into business affairs. These statements are
therefore of great interest to scholars undertaking research in accounting
theory as well as business affairs and practices.

The nature of business income

One of the main objectives of financial accounting is to ascertain whether the

business operations have been profitable or not. Accounting enables us to
find out whether a business has earned profits or suffered losses during the
accounting period.