1) 3 financial reports a company produces are: A. Income statement B. Balance Sheet C. Breakeven Analysis 2) What are some of the benefits of being able to read and understand a company’s annual report? A. To be able to measure the performance of a business for a period of time.
GAAP stands for Generally Accepted Accounting Principles. The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information. GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements.
Comparison Ethics in accounting are very important for manager to make a good decision for the company so that investor can make a good investment. There are three standards that set professional standards and provide certification options and continuing education for accountant: The AICPA Code of Professional Conduct, the IMA Statement of Ethical Professional Practice, and the Statement on Standards for Tax Services. The primary focus of the IMA is on management accounting and financial accounting issues. IMA sets high ethical standards for accountants who serve the company. As a result, IMA serves businesses that help manager to make decision by working within the company.
Chapter 1 Answers Dia Coleman 1. An assurance service is an independent professional service to improve the quality of information for decision makers. An attestation service is a form of assurance service in which the CPA firm issues a report about the reliability of an assertion that is the responsibility of another party. Audit services are a form of attestation service in which the auditor expresses a written conclusion about the degree of correspondence between information and established criteria. The most common form of audit service is an audit of historical financial statements, in which the auditor expresses a conclusion as to whether the financial statements are presented in conformity with generally accepted accounting principles.
United States and other developed economies use two key functions for the financial statements. They provide a way for company management to transfer information about business activities to people outside the company, which helps solve important problems known as information asymmetry. Also, Financial statement information is often included in contracts between the company and other parties (such as lenders or managers) because doing so improves contract efficiency. 2. Managers choose accounting procedures that produce the most accurate picture of the company’s operating performance and financial condition.
Merliss wants to be sure that all reporting for this transaction is proper and transparent. The company asks you to research disclosure requirements related to its capital structure. A) Identify the authoritative literature that addresses disclosure of information about capital structure. Statement of Financial Accounting Standards (SFAS) No. 129 This statement sets standards for disclosing information about an entity’s capital structure.
• How has the firm’s mission statement and six (6) key values helped to determine its core accounting business practices? • What is meant by Irv Katz’s business strategy: “Don’t just have clients; have partners for life”? 2. How does Katz, Sapper & Miller ensure superior customer service and client satisfaction? Consider the following: • What kinds of accounting, audit, and tax services does the firm provide?
Before the accounting elements become part of the financial statements required from companies particularly the publicly listed ones, a transaction or event should comply first with the standards’ requirement on measurement. \ The accounting elements are referring to the assets, liabilities, equity, revenue and expenses (Englard, 1995). 2.2 The accounting theory on recognition of accounting elements and IASB’s framework on recognition and measurement. The accounting theory on recognition of accounting elements requires that before assets, liabilities,
This provides an understanding of how much income is needed to pay bills and how much is left to save. The following will provide a summary of facts and an analysis of the Griffins personal budget, balance sheet, and cash flow statement and recommendations to help improve their financial situation. Summary of Facts When examining financial success; Quahog Accounting Firm takes into account certain attributes, such as age, dependents, educational background, and income status. These attributes has an impact financial planning because they affect the financial statements. The following is the summary of facts used to examine your financial success.
ACC111 - Accounting Principles I Allissia Henz 8/18/2013 TARGET CORPORATION FINANCIAL ANALYSIS AND INTERPRETATION Financial analysis refers to a process individuals use to appraise the financial condition of a given firm or organization. Usually this can be done by the firm itself internal financial analysis to help it allocate resources wisely or externally by other individuals such as future shareholders, creditors, unions, competitors among others to gain a general overview of a firm’s financial condition. Among the financial ratios that are useful include liquidity, working capital current ratio among others. In this task I will calculate the working capital, turnover ratio and current ratios for Target Corporation for the years 2004 through 2006. From 2004-2006: Working Capital=Current Assets – Current Liabilities For 2006: Working capital = $14,405.