Chapter 1 Accounting

CA1-1 a) differentiates between financial accounting and managerial accounting?

Financial accounting: is the process that culminates in the preparation of financial reports on the enterprise as a show for use by both internal and external parties.

Managerial accounting; is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate and control an organization’s operations.

b) One part of financial accounting involves the preparation of financial statements. What are financial statements most frequently provided?

1- The balance sheet, 2- income statement, 3- the statement of cash flows and 4- the statement of owner’s equity

C) What is the difference between financial statements and financial reporting?

Financial statements are the principal means through which financial information is communicated to those outside an enterprise, financial reporting , some financial information is better provided or can be provided only by means of financial reporting other than formal financial statements; examples include the president’s letter or supplementary schedules in the corporate annual report, prospectuses reports filed with government agencies new releases, management’s forecasts and certifications regarding internal control and fraud.

CA1-7 a) CAP The Committee on Accounting Procedure (CAP) composed of practicing CPAs issued 51 Accounting Research Bulletins during the years 1939 to 1959; these bulletins deal with a variety of accounting problems, but this problem by problem approach failed to provide the structure body of accounting principles that was both needed and desired . APB Accounting Principles Board the major purpose were 1) to advance the written expressions of accounting principles 2) to determine appropriate practices and 3) to narrow the areas of difference and inconsistency in practice. FASB Financial Accounting Standards Board (FASB) its mission is to establish and improve...