F Ch1 problems

F Ch1 problems - 1. Whatisfinancialaccounting?

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1. What is financial accounting?  financial accounting  is the communication of information about a business or other type of organization (such as a  charity or government) so that individuals can assess its financial health and prospects. 2. How does financial accounting differ from managerial accounting?  Managerial accounting is the communication of information within an organization so that internal decisions can be  made in an appropriate manner. Financial is for externally judging the healthiness of corporations. 3. List the potential users of the information provided by financial accounting. Investors, banks, corporations, stockholders 4. What is a corporation? corporation  is an organization that has been formally recognized by the government as a legal entity.  5. How does a business become a corporation? Owners of a business or other type of organization apply to the state government to have it identified as an entity  legally separate from its owners. 6. Why would a business want to become a corporation? Less personal liability in the investment 7. What is the board of directors of a corporation? Group elected by shareholders to hire and oversee the management of the company and make policy decisions. 8. Why do individuals or entities choose to invest in the capital stock of corporations? The value of the stock can increase over time and can pay dividends.
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This note was uploaded on 02/14/2012 for the course BUSI 101 taught by Professor Skender during the Spring '08 term at UNC.

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F Ch1 problems - 1. Whatisfinancialaccounting?

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