CH01 - CHAPTER 1 Financial Accounting and Accounting...

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Unformatted text preview: CHAPTER 1 Financial Accounting and Accounting Standards ASSIGNMENT CLASSIFICATION TABLE Topics Questions Cases 1. Subject matter of accounting. 1, 2 1 2. Environment of accounting. 3, 4, 5 3, 4 3. Role of principles, objectives, standards, and accounting theory. 6, 7, 8, 9 2, 4 4. Historical development of accounting standards. 9, 10, 11, 12, 13 5, 17 5. Authoritative pronouncements and standard-setting bodies. 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 32 6, 7, 8, 10, 11, 12, 13, 14, 15, 16 6. Role of pressure groups. 25, 26, 27, 28, 29, 30 9, 18, 19 7. International accounting. 31 15 8. Ethical issues. 32, 33 1-1 ASSIGNMENT CHARACTERISTICS TABLE Ite m Description Level of Diffic ulty Time (minu tes) C1-1 Financial accounting. Simpl e 15-20 C1-2 Objectives of financial reporting. Moder ate 20-25 C1-3 Accounting numbers and the environment. Simpl e 10-15 C1-4 Need for accounting standards. Simpl e 15-20 C1-5 AICPA’s role in standard setting. Simpl e 20-25 C1-6 FASB role in standard setting. Simpl e 20-25 C1-7 Government role in standard setting. Simpl e 10-15 C1-8 Meaning of generally accepted accounting principles. Moder ate 20-25 C1-9 Politicalization of standard setting. Compl ex 30-40 C1- 10 Models for setting accounting standards. Simpl e 15-20 C1- 11 Standard-setting terminology. Moder ate 30-40 C1- 12 Accounting organizations and documents issued. Simpl e 15-20 C1- 13 Accounting pronouncements. Simpl e 10-15 C1- 14 Issues involving standard setting. Compl ex 40-50 C1- 15 Securities and Exchange Commission. Moder ate 30-40 C1- 16 Standard-setting process. Moder ate 25-35 C1- 17 Evolution of accounting standard-setting organizations. Moder ate 25-30 C1- 18 Role of Congress and International in standard- setting. Moder ate 25-30 1-2 C1- 19 Evaluation of political process in standard-setting. Moder ate 25-30 1-3 ANSWERS TO QUESTIONS 1. Accounting may best be defined by describing the three essential characteristics of accounting: (1) identification, measurement, and communication of financial information about (2) economic entities to (3) interested persons. 2. Financial accounting measures, classifies, and summarizes in report form those activities and that information which relate to the enterprise as a whole for use by parties both internal and external to a business enterprise. Managerial accounting also measures, classifies, and summarizes in report form enterprise activities, but the communication is for the use of internal, managerial parties, and relates more to subsystems of the entity. Managerial accounting is management decision oriented and directed more toward product line, division, and profit center reporting. 3. Financial statements generally refer to the four basic financial statements: balance sheet, income statement, statement of cash flows, and statement of changes in owners’ or stockholders’ equity. Financial reporting is a broader concept; it includes the basic financial statements and any other means of communicating financial and economic data to interested...
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This note was uploaded on 06/01/2008 for the course ACC 305 taught by Professor Gal during the Spring '08 term at Rutgers.

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CH01 - CHAPTER 1 Financial Accounting and Accounting...

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