Intermediate Accounting Chapter 1 Exercises

Good Essays
CA 1-4:
(a) Differentiate between Financial Accounting and Managerial Accounting.
While financial accounting is the process that culminates in the preparation of financial reports on the enterprise for use by both internal (as managers) and external parties (as investors, creditors, unions, and government agencies), managerial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, control, and evaluate a company's operations.
(b) One part of Financial Accounting involves the preparation of Financial Statements. What are the Financial Statements most frequently provided?
The financial statements most frequently provided are (1) the balance sheet, (2) the income statement, (3) the statement of cash flows, and (4) the statement of owners' or stockholders' equity. Note disclosures are an integral part of each financial statement.
(c) What is the difference between Financial Statements and Financial Reporting?
Financial reporting is used to disclose additional financial information, - as the president's letter or supplementary schedules in the corporate annual report, prospectuses, reports filed with government agencies, news releases, management's forecasts, and social or environmental impact statements -, other than formal financial statements when Companies need it because of authoritative pronouncement, regulatory rule, or custom, or wish it voluntarily.
CA 1-7:
Some argue that having various organizations establish accounting principles is wasteful and inefficient. Rather than mandating accounting rules, each company could voluntarily disclose the type of information it considered important. In addition, if an investor wants additional information, the investor could contact the company and pay to receive the additional information desired. Comment on the appropriateness of this viewpoint.
I think that the need to learn what standards are using each company in order to

You May Also Find These Documents Helpful

  • Good Essays

    Intermediate Notes 101

    • 617 Words
    • 3 Pages

    2. Financial Statements include balance sheet, income statement, statement of cash flow, statement of owners or stockholders equity. Financial Reporting includes corporate annual reports, prospectuses, reports filed with gov’t agencies, news releases, management forecasts, and social or environmental impact statements.…

    • 617 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Typically, financial statement consists four types which are Statement of Financial Position, Income Statement, Cash Flow Statement, and Statement of Changes in Equity. Basically for a company they use the three financial statements. There are Statement of Financial Position, Income Statement, and Cash Flow Statement.…

    • 1379 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    General Mills

    • 1866 Words
    • 8 Pages

    1) The following are the financial statements that are commonly prepared for external reporting purposes:…

    • 1866 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    BA 620 exam

    • 6842 Words
    • 28 Pages

    The annual report contains four basic financial statements: the income statement, balance sheet, statement of cash flows, and statement of stockholders’ equity.…

    • 6842 Words
    • 28 Pages
    Powerful Essays
  • Powerful Essays

    The financial statements commonly prepared for external reporting purposes which are included in the company’s 10-K include the following: 1) statements of earnings, 2) balance sheets, 3) stockholders equity and comprehensive income and cash flows.…

    • 3098 Words
    • 13 Pages
    Powerful Essays
  • Good Essays

    Financial Statement Analysis

    • 4324 Words
    • 18 Pages

    The four financial statements are: the balance sheet, the income statement, the statement of cash flows, and the statement of changes in shareholders’ equity. Financial are required to be audited by a neutral third party, who checks and ensures that the financial statements are prepared according to GAAP or accounting standards and that the information contained is reliable.…

    • 4324 Words
    • 18 Pages
    Good Essays
  • Good Essays

    Financial Statement Paper

    • 898 Words
    • 4 Pages

    The four basic financial statements are (1) Balance Sheet, (2) Income Statement, (3) Statement of Retained Earnings, and (4) Statement of Cash Flow (Kimmel, Weygandt, & Kieso, 2010).…

    • 898 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Financial Statements

    • 742 Words
    • 3 Pages

    Financial statements are records of relative financial information of organizations that are highly valuable to both internal and external users of that organization. The following four basic financial statements constitute the foundation of accounting:…

    • 742 Words
    • 3 Pages
    Good Essays
  • Best Essays

    Financial statements are essential accounting tools which include balance sheets, cash flow statements, and income statements that provide information on a company 's past and present financial history. Information on financial statements can be used by any number of public and private entities to determine if an organization 's financial status is healthy. Burger King and McDonald 's are two organizations that use financial statements in conducting business.…

    • 1840 Words
    • 6 Pages
    Best Essays
  • Satisfactory Essays

    Essay

    • 837 Words
    • 4 Pages

    In any company, organization, and foundation there is a financial side of things to help keep account of assets, expense, liabilities, and revenue with the importance of the four basic financial statements. Income statement, Balance sheet, Cash flow Statement, and Statement of shareholders Equity.…

    • 837 Words
    • 4 Pages
    Satisfactory Essays
  • Best Essays

    Financial reporting and full disclosure ensures that the firm will provide necessary information to stakeholders/stockholders who have a vested interest in the firm’s performance. This communication of information establishes a trusting relationship with stakeholders, and adds value to the overall firm. Corporations must implement some type of strategy that will enable monitoring of financial reporting because of the possibility that someone within the company may have an interest in altering or changing financial information for their personal gain, or for the personal gain of an outside party. The main concern of firms is the possible revealing of all information, but the only information necessary is the information that can possibly affect the decision of an investor or other interested parties (Kranacher, 2011). There are several stakeholders and stockholders who utilize this information to capture how well a company is performing, and this financial information gives informative data that allows outside parties the opportunity to make an informed…

    • 2745 Words
    • 11 Pages
    Best Essays
  • Good Essays

    Narrative

    • 1926 Words
    • 8 Pages

    Accounting has been called the language of business and is used in many different situations. Cost accounting is used to streamline manufacturing operations. Managerial accounting is used to compile data necessary for sound management decisions. Financial accounting is used to report the financial result of a company's operations. Public companies are required to report their results to the public, while private companies report to their owners. In either case, accounting creates financial statements for analysis.…

    • 1926 Words
    • 8 Pages
    Good Essays
  • Good Essays

    The term financial statement is usually used for all or any of the following statements:…

    • 375 Words
    • 2 Pages
    Good Essays
  • Good Essays

    finanical statement

    • 707 Words
    • 3 Pages

    The four main financial statement are the balance sheet, the income statement, the cash flow statements, and the statements of shareholder’s equity. Each statement can be used to give an insight to a company’s financial activities, and can provide valuable information on said company.…

    • 707 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    ACCT1501 Notes

    • 4689 Words
    • 19 Pages

    Financial statements are required to provide information such as financial position, financial performance, financing activities and investing activities…

    • 4689 Words
    • 19 Pages
    Powerful Essays