(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.
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