- January 11, 2007
- Posted by: Rosemarie Harvey
- Category: small business, small business tips, Uncategorized, virtual assistance
This post may apply mainly to the larger small businesses. However, regardless of the size of your business, your accounting information is important. Please remember to keep your financial records in order. Both internal and external users, at some point, need to access your accounting information.
External users of accounting information are users that rely on the information to make investment decisions, but are not involved in the daily operations of your business. Some examples of external users are:
- Owners
- Creditors (current and future)
- Investors (current and future)
- Labor Unions
- Government agencies
- Customers
- General public
Internal users of accounting information include:
- Internal reports
- Employees
The primary difference is that financial accounting reports on the performance of a company, which is used mainly by external users, whereas other accounting involves interpreting the information by internal users for making important business operational decisions.
Eight Steps in the Accounting Cycle:
- Journalize transactions
- Post transaction data to the register
- Prepare a trial balance
- Make end-of-period adjustments
- Prepare an adjusted trial balance
- Prepare financial statements
- Journalize and post the closing entries
- Prepare an after-closing trial balance
Source: Williams, J.R., Haka, S.F., Bettner, M.S. & Meigs, R. (2003) Financial Accounting
Wishing you success.
Rosemarie Harvey
Virtual Assistant
RH Business Support
Originally published in RH Business Support’s newsletter Business Briefs Et Cetera, Vol. 1, Issue 1, August 2005