Why is it important that FINANCIAL accounting provide a common set of standards that are used by all companies in preparing their financial statements? So that outsiders can compare financial reports coming from many different companies To provide standardized data used in computing government statistics So that income taxes can be collected in a fair and equitable fashion To serve the competitive needs of companies working to uniquely serve specific customers in specific markets 2 Businesses use accounting systems to: Handle routine bookkeeping tasks Evaluate the performance and health of the business All of these are correct Analyze transactions

Why is it important that FINANCIAL accounting provide a common set of standards that are used by all companies in preparing their financial statements? So that outsiders can compare financial reports coming from many different companies To provide standardized data used in computing government statistics So that income taxes can be collected in a fair and equitable fashion To serve the competitive needs of companies working to uniquely serve specific customers in specific markets 2 Businesses use accounting systems to: Handle routine bookkeeping tasks Evaluate the performance and health of the business All of these are correct Analyze transactions

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 1EB: Match the correct term with its definition. A. Financial Accounting Standards Board FASB) i. used by...

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Match the correct term with its definition. A. Financial Accounting Standards Board FASB) i. used by the FASB, which is a set of concepts that guide financial reporting B. generally accepted accounting principles (GAAP) ii. independent, nonprofit organization that sets financial accounting and reporting standards for both public- and private-sector businesses that use generally accepted accounting principles (GAAP) here in the United States C. Securities and Exchange Commission SEC) iii. standards, procedures, and principles companies must follow when preparing their financial statements D. conceptual framework iv. assumes a business will continue to operate in the foreseeable future E. going concern assumption v. independent federal agency protecting the interests of investors, regulating stock markets, and ensuring companies adhere to GAAP requirements F. time period assumption vi. companies can present useful information in shorter time periods such as years, quarters, or months
Companies need to report both monetary and nonmonetary data and information. A. Define these two terms and provide examples of each. B. Discuss what sources are available that provide companies with both types of data and information.
Use the internet to research one manufacturing, one retail (or merchandising), and one service business. For each business, describe the following: A. the primary purpose of the entity B. the types of activities that accountants would record (hint: what is the source of the business funding, and what costs might the business have?) C. the types of decisions that might be made in this organization and how financial and nonfinancial information might help the decision-making process
A company reports accounting data in its financial statements. This data is used for financial analyses that provide insights into a company’s strengths, weaknesses, performance in specific areas, and trends in performance. These analyses are often used to compare a company’s performance to that of its competitors or to its past or expected future performance. Such insight helps managers and analysts improve their decision making. Consider the following scenario: You work as an analyst at a credit-rating agency, and you are comparing firms in the construction and engineering sector. One company in the portfolio of companies you are analyzing is a Chinese firm. This firm stands out in the ratio analysis, because the company’s financial ratios are substantially lower than identical financial ratios of the other firms in the sector. You do not dissect the results of the ratio analysis and report this firm as an under-performing company. Which of the following statements about…
Why is it important that FINANCIAL accounting provide a common set of standards that are used by all companies in preparing their financial statements? So that income taxes can be collected in a fair and equitable fashion To serve the competitive needs of companies working to uniquely serve specific customers in specific markets To provide standardized data used in computing government statistics So that outsiders can compare financial reports coming from many different companies
Providing information about the performance and financial position of companies so that users can make economic decisions best describes the role of: Select one: O a. Financial reporting. O b. Financial statement analysis. O c. Auditing.
How can companies improve their accounting quality, and what are some best practices for maintaining accurate financial information over time?
Centify which branch or field of accounting provides the functions and services stated below. Choose from the choices given. financial accounting management accounting tax accounting accounting education forensic accounting cost accounting government accounting auditing fiduciary accounting 1. Validation of financial statements 2. Preparation of tax returns 3. Presentation of cost incurred in business operations 4. Accounting for public funds 5. Recording and presentation of financial records to external users 6. Accounting to help managers and owners plan and manage their business 7. Development of accounting curriculum in educational institutions 8. Provision of guidance for compliance to tax obligations 9. Management of the business, possessions, and or property of another individual party 10. Branch of accounting involved in criminal or civil cases investigation
Accounting professionals apply many technology tools to aid them in their everyday tasks and decision making. The General Ledger tool in Connect automates several of the procedural steps in the accounting cycle so the accounting professional can focus on the impacts of each transaction on the full set of financial statements. use this tool in helping students see the advantages of technology and, in particular, the power of the General Ledger tool in accounting practice, including financial analysis and “what-if” scenarios. What is the total amount of assets invested in Apple in the current year?
Explain the various methods used to measure and report the performance of a business in accounting theory. What are the limitations of these methods, and how can businesses overcome them to provide more accurate and reliable information to stakeholders?
Required information Accounting is an information and measurement system that aims to identify, record, and communicate information about business activities. It helps assess opportunities, products, investments, and social and community responsibilities. Users of accounting are both internal and external. Some users and uses of accounting include (a) managers in controlling, monitoring, and planning; (b) lenders for measuring the risk and return of loans; (c) shareholders for assessing the return and risk of stock; and (d) employees for judging employment opportunities. Opportunities in accounting include financial, managerial, and tax accounting. 430s :00 / 1:27 1x Knowledge Check 01 Select the correct term for the following types of users: Users Terms Customers Purchasing manager Marketing Manager Suppliers Labor Union
Accounting information provides useful information about business transactions and events. Those who provide and use financial reports must often select and evaluate accounting alternatives. The FASB statement on qualitative characteristics of accounting information examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information. Instructions a. Describe briefly the following characteristics of useful accounting information. 1. Relevance. 2. Faithful representation. 3. Understandability. 4. Comparability. 5. Consistency. b. For each of the following pairs of information characteristics, give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other. 1. Relevance and faithful representation. 2.…