Accounting Final

1. Differentiate among each of the following types of accounting—financial, managerial, cost, public, internal auditing, governmental or not-for-profit accounting (fund accounting), tax and international.

Financial accounting is the field of accountancy concerned with the preparation of financial statements for decision makers, such as stockholders, suppliers, banks, employees, government agencies, owners, and other stakeholders. Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power. The fundamental need for financial accounting is to reduce principal–agent problem by measuring and monitoring agents' performance and reporting the results to interested users.

Financial accounting is used to prepare accounting information for people outside the organization or not involved in the day-to-day running of the company. Management accounting provides accounting information to help managers make decisions to manage the business.

In short, financial accounting is the process of summarizing financial data taken from an organization's accounting records and publishing in the form of annual reports for the benefit of people outside the organization.

Financial accountancy is governed by both local and international accounting standards.

Financial accountants produce financial statements based on generally accepted accounting principles of a respective country. In particular cases financial statements must be prepared according to the International Financial Reporting Standards.

Financial accounting serves the following purposes:

Producing general purpose financial statements, Producing information used by the management of a business entity for decision making, planning and Performance evaluation, Producing financial statements for meeting regulatory requirements.

To know the results of the business, To ascertain the financial position of the business

To ensure control over the assets, To...