The diagram shows the accounting system at the center, and branching to the left and right. To the left is internal reporting, managerial accounting. To the right is external reporting, financial accounting. On the internal side, the diagram reads as follows. Financial reports for internal use by company management; sales reports, production cost reports, and other detailed financial reports. On the external reporting side, the diagram reads as follows. Financial statements for use by investors, lenders, and others outside the organization; balance sheet, income statement, and statement of cash flows.
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