Users can be divided into Internal users and External users.

Internal users of accounting information are managers, supervisors and directors.

External users are resource providers (investors, employees, contributors, members, creditors, donors, lenders), recipients of goods (customers and beneficiaries), and Parties performing a review or oversight function (parliaments, regulatory agencies, media, employer groups, governments, trade unions, analysts).

Three main types of activities in a financial statement for external users are; financing, investing and operating activities.

• Financing activities

The two main source of outside funds for companies are borrowing money and selling shares. There are many ways of borrowing money, by taking out a loan at a bank, or issuing debt securities which is borrow from lenders. Two types of debt securities are unsecured notes and debentures. Main difference is that debentures are secured by a charge over assets of the issuer, that specified assets can be sold to pay the debenture holders if the issuer defaults.

As the business grows, it becomes necessary to sell shares to obtain additional financing, share capital is the total amount paid by the shareholders. 

However, creditors differ from shareholders. If you lend money to a company, you are one of its creditors. As a creditor, you have a legal right to be paid at the agreed time. If the company does not have the ability to pay , you may legally force the company to take action, such as selling its property. If you buy a company's shares, you will receive dividends (distribution of profits not repayment of capital), but you have no rights to expect any payments until all its creditors are paid.  

• Investing activities

Its the purchase of resources that company needs in order to operate, such as property, plant and equipment, and account receivable (if the company sells goods to a customer and does not receive money immediately, then it has the right to expect payment in the future).

• Operating activities

Once the business has the assets it needs to get started, it cab begin its operations. First the company must purchase or make a product, it will incur costs like salaries, rent and electricity, all the costs of assets consumed or services used in generating revenues are called expenses. 

Types of expenses: cost of goods sold, selling expenses (sales-person's salaries), marketing expenses (cost of advertising), administrative expenses, and interest expenses (interests paid on debts). When revenues exceed expenses, profit result, but when expenses exceed revenues, a loss results.  

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