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Accounting 303 chapter 1 homework

Accounting 303 chapter 1 homework - accounting concepts.”...

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Accounting 303 Janna Lenhart Chapter 1 Homework July 12, 2009 1.) Differentiate broadly between financial accounting and managerial accounting. Financial accounting involves the reporting of financial information through the financial statements; Balance sheet, Statement of Owners Equity, Statement of Cash Flows and the Income Statement. Managerial accounting involves the analysis of information by management in order to plan for the future of the business. 5.) What are the major objectives of financial reporting? To provide accurate information that anyone can use to help them determine whether to invest in or loan a business money. To evaluate a company’s efficient use of its resources, including assets and income. To communicate information that is useful in determining a company’s potential for cash flow. 15.) Distinguish between FASB “statements of financial accounting standards” and FASB “statements of financial
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Unformatted text preview: accounting concepts.” Accounting Standards are a uniform set of rules that the public deems necessary to maintain confident in businesses, and not just in singular company’s but in the entire corporate world. Accounting Concepts are not a set of rules however but related situations or themes that provide guidance in coming up with solutions to problems. 16.) What is rule 203 of the Code of Professional Conduct? This rule states that an accountant is not allowed to overlook any situation that does not meet GAAP. Doing so could mean the loss of their license. 19.) What is the purpose of FASB Staff Positions? A Staff Position is issued by FASB to provide additional assistance in better understanding the generally accepted accounting principles. It can be used to make minor changes and maintains the same substance as a standard....
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