General and Commercial Basis Accounting Principles Generally accepted accounting principles (GAAP) state the standard framework of guidelines for financial accounting used in any given jurisdiction; commonly known as standard accounting practice or accounting standards. These contain the rules, standards, and conventions that accountants practice in recording, summarizing and in the preparation of financial statements. Hubpages.com discusses commercial accounting, also known as profit accounting, defining that it performs mainly by profit and loss. The reporting for a profit organization is directed to the investors. ("The Principles of Commercial Accounting and Fund Accounting", 2011).
Financial accounting information is used for a.|investment decisions.| b.|regulatory measures.| c.|stewardship evaluation.| d.|all of these.| ANS: D PTS: 1 DIF: Easy OBJ: 1-1 NAT: AACSB Communication 6. Which of the following is NOT part of the financial accounting information system? a.|filing reports with the SEC| b.|reporting a large contingent liability to current and potential shareholders| c.|determining the future cashflows of a proposed flexible manufacturing system| d.|preparing GAAP financial statements| ANS: C PTS: 1 DIF: Meduim OBJ: 1-1 NAT: AACSB Reflective 7. Which of the following does NOT describe cost management system? a.|evaluation of segments or products within the firm| b.|emphasis on the future| c.|externally focused| d.|focus on effective use of
MULTIPLE CHOICE QUESTIONS 1. The statement of cash flows should help investors and creditors assess each of the following except the a. entity's ability to generate future income. b. entity's ability to pay dividends. c. reasons for the difference between net income and net cash provided by operating activities. d. cash investing and financing transactions during the period.
Assets that are ready for their intended use or sale when acquired are also not qualifying assets. Borrowing costs may include: i. Interest expense calculated using the effective interest rate method as described in MFRS 139 Financial Instruments: Recognition and Measurement, ii. Finance Charges in respect of finance leases recognized in accordance with MFRS 117 Leases, and iii. Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost.
Data sourced ... Historical financial statement Historical financial statement BDO Seidman BDO Seidman 2). Documentation with its customer regarding its orders 3). Its credit and bad debt write-off policy 3. Non-financial factors the auditor should consider: 1).
The GAAP and IFRS have similarities and differences for the financial reporting. Similarities are recognizing the property, plant, and equipment initially at cost and the assets are depreciated over the expected useful life. A major difference relating to the property, plant, and equipment is the IFRS allows for
The disclosure shows the loss contingency and states the estimate of loss. Before the company issues the financial statement and after the enterprise’s financial statement is done, the company can impair an asset or incur the liability. Disclosure of loss contingencies helps the company to keep its financial statements not being misleading. When the disclosure is necessary, the company must report the loss contingency in financial statements with a given estimate of the mount of loss. Reference Financial Accounting Standards Board (2010).Statement of Financial Accounting Standards No.
Ethical concerns in Management Accounting Brittany N. Vaichus Liberty University Abstract The science of Accounting is not as black and white as the numbers accountants use. Financial accounting is bound by the Generally Accepted Accounting Principles (GAAP), while Management Accounting is not. Management Accounts have more liberties because this type of accounting is used for future decision making within the corporation. There are many different ways to determine the cost of goods sold, and the different methods will therefore reflect different levels of profit or contribution margin. Managerial Accountants should calculate net income or loss in a manner that accurately reflects the closest true costs and profits as determined by the International Federation of Accountants (IFA).
The general accepted accounting principles regulate and standardize preparation of financial reports which are distributed to the public. Companies are required to comply with GAAP when presenting external financial reports (Kieso, D. E., Weygandt, J. J., & Warfield, T. D, 2007). An accrual basis accounting system is different from just tracking incoming and
Chapter 1 Managerial Accounting: An Overview Solutions to Questions 1-1 Financial accounting is concerned with reporting financial information to external parties, such as stockholders, creditors, and regulators. Managerial accounting is concerned with providing information to managers for use within the organization. Financial accounting emphasizes the financial consequences of past transactions, objectivity and verifiability, precision, and companywide performance, whereas managerial accounting emphasizes decisions affecting the future, relevance, timeliness, and segment performance. Financial accounting is mandatory for external reports and it needs to comply with rules, such as generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS), whereas managerial accounting is not mandatory and it does not need to comply with externally imposed rules. 1-2 Five examples of planning activities include (1) estimating the advertising revenues for a future period, (2) estimating the total expenses for a future period, including the salaries of all actors, news reporters, and sportscasters, (3) planning how many new television shows to introduce to the market, (4) planning each television show’s designated broadcast time slot, and (5) planning the network’s advertising activities and expenditures.