Meaning, Objectives and Users of Accounting
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Lesson overview
Why accounting exists, and who relies on its output.
Go to lesson quiz →Exam guidance · WAEC WASSCE Paper 1 + Paper 2 Lens
Pacing
Objective speed on Paper 1 + structured step-by-step method marks on Paper 2 Theory/Practical.
How WAEC marks this
Examiners award method marks (M1) for stating the formula/definition and accuracy marks (A1) ONLY when SI units are written.
Watch out for
Writing bare numbers without working or omitting SI units loses up to 50% of Paper 2 marks even when the final value is right.
Lesson content
Overview — Meaning, Objectives and Users of Accounting
Why accounting exists, and who relies on its output. This lesson is at the beginner level — by the end, you'll be able to recognise this question type, apply a reliable method, and avoid the traps that cost marks.
Key Concept
Accounting is the process of recording, classifying, summarising and interpreting financial transactions to provide information for decision-making. Its main objective is to determine a business's profit or loss and its financial position at a point in time.
Why It's Tested This Way
WAEC/JAMB open the syllabus by testing WHO uses accounting information (owners, managers, government/tax authorities, creditors, investors, employees) because every later topic — from the trial balance to the balance sheet — exists specifically to serve one or more of these users' needs.
Method
When asked to name users of accounting information, be ready to also state WHY each user needs it: owners (to assess profitability), managers (to make decisions), tax authorities (to assess tax owed), creditors/lenders (to assess ability to repay debt).
Worked Example
Worked example: A bank considering whether to lend a business money is a USER of that business's accounting information — specifically to assess the business's ability to repay the loan, based on its recorded profitability and financial position.
Second Worked Example
Second worked example: The government's tax authority uses a business's accounting records specifically to calculate the correct amount of tax owed, based on the profit the records show was earned.
Common Traps
Common trap: naming users of accounting information without explaining WHY each one needs it — WAEC frequently asks for both the user and their specific reason for needing the information.
Lesson Summary
Remember: (1) identify what is being asked, (2) apply the WAEC strategy, (3) check against the traps. Complete the 10-question quiz below to unlock the next lesson — you need at least 60% to pass.
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