Explore BrainMass

Explore BrainMass

    Accounting

    Accounting is the business discipline that studies how a company's financial information can be manipulated and presented, in a meaningful way, to enhance the decision-usefulness of that financial information. We typically think of accounting as incorporating three related disciplines: financial accounting, management accounting, and auditing.

    Financial accounting

    Financial accounting looks to present financial information that is useful to external users, such as investors and creditors, who use this information to make resource allocation decisions between businesses. This information is subject to IFRS or US GAAP, is prepared using double-entry bookkeeping, and is presented in four required financial statements: the balance sheet, the income statement, the cash flow statement, and the statement of owner's equity.

    Management accounting

    Management accounting deals with information that is used by internal users, such as a business's managers, who use this information to make resource allocation decisions within the firm. These include short-run production decisions and long-run capital budgeting decisions. (At BrainMass.com, we look at capital budgeting decisions under Corporate Finance.)

    Management accounting information comes in a variety of financial reports, including budgets. This information is not subject to accounting standards, and how this information is prepared changes based on the costs of collecting financial information and the benefits that this information has for management decision-making. As a result, a variety of different management accounting techniques are used.

    Auditing

    Auditing typically refers to financial auditing of public companies. Financial audits are conducted by independant external auditors, who provide an opinion about a company's financial reports. These auditors must adhere to Generally Accepted Auditing Standards (GAAS) in the United States, and their opinions give investors reasonable assurance that financial reports are true, fair, and adhere to applicable accounting standards. The auditor must also include an opinion about the effectiveness of a company's internal controls.

    In addition to the financial audit, there is a range of many different types of audit and assurance services. Many financial auditing firms also provide a range of these services, giving feedback about the effectiveness of a company's processes and procedures. These services may also be provided by in-house internal auditors that work within a single company.

    © BrainMass Inc. brainmass.com March 19, 2024, 12:00 am ad1c9bdddf

    BrainMass Categories within Accounting

    Financial Accounting & Bookkeeping

    Solutions: 10,937

    BrainMass Solutions Available for Instant Download

    Markers Tattoo: Net Present Value

    Markers Tattoo studio is thinking about buying a new piece of laser therapy equipment. The cost of the equipment is $300,000 with an installation fee of 20,000. It is estimated Markers can make $98,000 annually with their new service to clients. The equipment would require an annual maintenance fee of $10,000. The equipment is e

    Batter Up Aug-Dec journal entries (other than inventory)

    1. The following events occurred during the year. Book the entries necessary for the corresponding transactions that have occurred. August 1: The business owner loaned the company $10,000 at 4% interest annually to be paid in full in three years. August 15: A new one-year lease agreement was signed for a new sporting good

    Tyler Consulting: Trial Balance, Statement of Equity

    Given December activity, post to ledger, create trial balance and income statement. 1-Dec Cash 500 Franklin Accounts Receivable 500 2-Dec Gusto's Inc Accounts Payable 1,500 Cash #1301 1,500 3-Dec Rent Expense 2,000 Cash #1302 2,000 4-Dec Washington Accounts

    Shilow Master Budget Sales Purchases Payments Budgets

    The key information and instructions related to the project is listed below: The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: a. The gross margin is 25% of sales. b. Actual and budgeted sales data: c. Sales are 60% for cash and 40% on credit. Credit sales are colle

    Brett Collins expected NPV actual NPV 10% discount rate

    Brett Collins is reviewing his company's investment in a cement plant. The company paid $16,000,000 five years ago to acquire the plant. Now top management is considering an opportunity to sell it. The president wants to know whether the plant has met original expectations before he decides its fate. The company's discount rate

    A Company October Journal Entries Accounting Data Appendix

    The following events occurred in October: October 1: The business owner used $25,000 from their personal savings account to buy common stock in their company. October 1: Purchased $8,500 worth of baking supplies from vendor, on account. October 3: The company borrowed $10,000 in cash, in exchange for a two-year, 6% not

    ACC 202 Milestone Three: Actual Costs and Revenue Data Appendix

    At the end of the first month of opening your business, you calculate the actual operating costs of the business and the income you earned. You also notice and document the difference in what you budgeted for certain materials and labor against the actual amounts you spent on the same. For your statement of cost of goods sold

    Market Research Data Breakeven Collars Leashes Harnesses

    You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell: ● Collars o With pricing at $20 per collar, you can expect to

    Payroll Accounting: Ryan Company

    Ryan Company paid salaries for the month of June 2020, amounting to $120,000. Of this amount, $30,000 was received by employees who had already been paid the $128,400 maximum amount of annual earnings taxable in one year under FICA laws. Of the $120,000, $14,000 was paid to employees who had already reached the $7,000 maximum wa

    Peter's Pool Corp: July transaction journal entries

    During its first month of operation, Peter's Pool Corporation, which specializes in pool repairs, completed the following transactions. July 1 Began business by making a deposit in a company bank account of $40,000, in exchange for 4,000 shares of $10 par value common stock. July 1 Paid the premium on a 1-year insurance policy

    Black, White, and Green partnership: Allocating Income

    On January 1, 2019, the partnership of Black, White, and Green was formed when the partners contributed $20,000, $60,000, and $50,000 into the business, respectively. The three partners agreed to allocate each year's partnership profit (or loss) according to a specified plan written as follows: - Each partner is entit

    Consolidation worksheet and the Parent or Subsidiary

    A clerk in the accounting department recently entered trial balance data for the parent company and its subsidiaries in the company's consolidation program. After a few minutes of additional work needed to eliminate the intercompany investment account balances, the clerk expressed his/her satisfaction with having completed the c

    Breakeven: Robotic device

    5) Background: You have developed a unique robotic device that will autonomously deliver groceries to people's house. Facts: • You are limiting your delivery service to 3 miles from store location. • The cost to produce the delivery robot is $9,300 per robot with a 3 year lifecycle • Market research indicates you will

    Killearn: Deferral of Intra-entity Gross Profit and more

    On July 1, 2016, Killearn Company acquired 88,000 of the outstanding shares of Shaun Company for $13 per share. This acquisition gave Killearn a 25 percent ownership of Shaun and allowed Killearn to significantly influence the investee's decisions. As of July 1, 2016, the investee had assets with a book value of $3 million and

    Southwestern Edison Hi-Tech Leasing Journal entries for 2018

    Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $90,000.   Other information:   Lease term 3 years Annual payments $40,000 on January 1 each year Life of asset 3 years Fair value of asset $111,332 Implicit interest rate 8% Incrementa

    Cheyenne Hotel: Using the High-Low Method

    High-Low Method 1. The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in th

    Cost Volume Profit Analysis Basics

    Cost-volume-profit analysis, or CVP, is something companies use to figure out how changes in costs and volume affect their operating expenses and net income. In other words, CVP is a methodical analysis of the dynamic inter-relationship between selling prices, sales and production volume, cost expenses, and profits. Ex

    Morrison-Greene: Six Ways to Allocate Partnership Income

    Mornson and Greene have decided to form a partnership. They have agreed that Mornson is to invest $291,000 and Greene is to invest $97,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are considered: a. Equal division. b. In the ratio o

    Abnormal Accrual Models: Detect Earnings Management

    Discuss how the abnormal accrual models in the literature are used to help detect earnings management. These models are widely used in accounting research; provide an example with citation (and link if available), and discuss the major finding and use of the model. In your answer explain the concept of an abnormal accrual from

    Cisco's Price to Book Ratio

    Annual Report Project Company Selections and P/B Ratios What company have you chosen for the Annual Report Project? What in particular interests you about this given company? Locate your public company's Form 10-K. You will find the most recent report in the "Investor" or "Investor Relations" section of the company's websi

    City of Monroe: General Fund entries and statements governmental

    Continuous Problem - City of Monroe The Balance Sheets of the General Fund and the Street and Highway Fund of the City of Monroe as of December 31, 2016, follow. These (beginning) balances have been entered in the proper general ledger accounts, as of 1/1/2017.   CITY OF MONROE General Fund Balance Sheet As of Decembe

    Partnerships and Corporations: major lawsuit probable damages

    Assume your company is involved in a major lawsuit and the probable damages are estimated to be $2,000,000. A. Describe the effects damage estimates would have on the financial statements of a corporation and a partnership. B. How do disclosure requirements differ from a corporation to a partnership and what information is re

    Statement of Changes in Financial Position Amazon 2017

    VI. Statement of Changes in Financial Position A. From the perspective of an investor, determine whether or not you would invest in your chosen company based on the company's statement of changes in financial position (SCFP). Support your opinion. The return on assets is very low, under 3% in every year and negative four ye

    What is meant by financial flexibility? (airline industry)

    I recently read in a financial magazine an article that indicated that the airline industry has poor financial flexibility. What is meant by financial flexibility? Why financial flexibility is important for the airline industry? How can the airline industry as a whole to improve their financial flexibility? What would be t

    Dialyze USA Capital Budgeting NPV risk sensitivity analysis

    Dialyze USA is considering opening a new branch dialysis and infusion center in a suburban free-standing strip center. Dialyze USA is a for-profit corporation, thus subject to income taxes. Equipment and fixtures for the center will cost $2,000,000 and be depreciated to $0 over a 5-year period on a straight line basis. Dial

    Nordic Company issued bonds with the following provisions

    Nordic Company issued bonds with the following provisions Maturity value: $60,000,000. Interest: 7.9 percent per annum payable semi-annually each June 30 and December 31. Terms: Bonds dated January 1, 2017, due five years from that date. The company's fiscal year ends on December 31. The bonds were sold on January 1, 2017, a

    Common-size presentation

    What is meant by "presentation of financial statement information in common-size amounts rather than dollar amounts?" Why is this type of presentation sometimes more meaningful than use of actual dollar amounts?

    Money Laundering Schemes

    Explain and discuss the major money laundering schemes. What are the phases of money laundering? Provide examples of how money laundering can be prevented. Find an article related to this topic and use it to support your answer.