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Who are external users of accounting information?
Similarly, a potential investor may look at a business’s past financial performance in order to assess whether or not to invest money in the company. In this scenario, the investor wants to know if the organization will provide a sufficient and consistent return on the investment. In these scenarios, the financial information provides value starting balance to the process of allocating scarce resources (money). General-purpose financial statements provide much of the information needed by external users of financial accounting. These financial