Functions of Accounting information

Accounting information addresses three different functions: 

 

(1) providing information to external parties (stockholders, creditors, and various regulatory bodies) for investment and credit decisions; 

(2) estimating the cost of products produced and services provided by the organization; and 

(3) providing information useful to in-ternal managers who are responsible for planning, controlling, decision making, and evaluating performance. Financial accounting is designed to meet external information needs and to comply with generally accepted accounting principles. 

 

Management accounting attempts to satisfy internal information needs and to provide product costing information for external financial statements.
 

Cost accounting creates an overlap between financial accounting and management accounting. Cost accounting integrates with financial accounting by providing product costing information for financial statements and with management accounting by providing some of the quantitative, cost-based information managers need to perform their tasks.