Briefly distinguish between managerial accounting and financial accounting. Be sure to comment on the general focus, users, and regulation related to the two fields.
What will be an ideal response?
Managerial accounting is concerned with providing information to personnel within an organization so that they can plan, make decisions, evaluate performance, and control operations. There are no rules and regulations associated with this field since the information is intended solely for use within the firm.
Financial accounting, in contrast, focuses on financial statements and other financial reports. This area deals with reporting to groups outside of an organization (e.g., stockholders, lenders, government agencies) so that some assessment of profitability and overall financial health can be made. Given the large number of firms in our economy and the varying level of user sophistication, the field is heavily regulated (by the Financial Accounting Standards Board and, to a lesser degree, by the Securities and Exchange Commission).
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When planning a presentation, which step of the process involves defining the purpose and developing an audience profile?
A) Selecting the channel B) Analyzing the situation C) Organizing the information D) Gathering information E) Selecting the media
The Income Summary account is a permanent account that will be carried forward period after period.
Answer the following statement true (T) or false (F)
Which of the following is/are not true?
a. U.S. GAAP and IFRS require firms to recognize the cost of retirement benefits (pensions, health care, life insurance) as an expense while employees work, not when they receive payments or other benefits during retirement. b. Employers often contribute cash to a trust, an entity legally separate from the employer, to fund their retirement obligations. c. The accounting records of the trust established to fund the retirement obligations are separate from the accounting records of the employer, and the amounts on the two sets of books usually differ. d. Payments to employees come from both the employer's contributions and investment returns of the firm's long term investment assets established to fund the retirement obligations. e. all of the above
A management concept that seeks to uncover and eliminate waste in business activities is called:
A. Lean business model. B. Customer orientation. C. Just-in-time. D. Theory of constraints. E. Continuous operations.