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. 
 

Categories within Accounting

Financial Accounting & Bookkeeping

Postings: 10,814

Financial advice

ABC Ltd. produces an MP3 player. The market for this product is increasing, and for this reason, ABC is planning to expand its production capacity. This plan requires new machinery and an increase in working capital that would be financed with borrowing. Complete the following: 1. What are the main sources of finance that

NPV approach

MedCo is a large manufacturing company, currently using a large printing press in its operations and is considering two replacements: the PDX341 and PDW581. The PDX341 costs £500,000 and has annual maintenance costs of £10,000 for the first five years and £15,000 for the next five years. After 10 years, the PDX341 will be scr

Angelo Diaz: Colorful Scarves

Angelo Diaz has decided to go into business selling colorful scarves which are popular among university students. He will operate the business out of a flea market, mostly on weekends. He is trying to get himself organized for the start of the first quarter. In order to do so, he will have to prepare a few budgets. Use the follo

Myers Co: Types of dividends on assets, liab & equity accounts

Myers Company provides you with the following condensed balance sheet information. Assets Current assets 43,600 Equity investments (ABC stock; 10,290 shares at cost) 41,160 Equipment (net) 252,900 Intangibles 60,310 Total assets397,970 Liabilities and Stockholders' Equity Current and long-term liabilities10

Principles of Accounting: The Ethics of Tax Credits

Western Bank & Trust purchased land and a building for the lump sum of $3 million dollars. To get the maximum tax deduction, Western allocated 90% of the purchase price to the building and only 10% to the land. A more realistic allocation would have been 70% to the building and 30% to the land. Explain the tax advantage of al

Dos Passos Company: Current Liability

Dos Passos Company sells televisions at an average price of $909 and also offers to each customer a separate 3 year warranty contract for $204 that requires the company to perform periodic services and to replace defective parts. During 2012, the company sold 303 televisions and 285 warranty contracts for cash. It estimates the

Quest Tech: Multiple arrangement revenue recognition

Quest Tech, Inc. manufactures and sells specialized data storage equipment and services to entertainment and media companies. The equipment is used to efficiently store large data files. Quest Tech is currently marketing its latest equipment, which includes the Company's new patented technology that significantly increases it

Current Liability Journal Entry

Employees are paid every Saturday for the preceding work week. If a balance sheet is prepared on Wednesday, December 31st, what does the amount of wages earned during the first three days of the week (12/29, 12/30, 12/31) represent? Explain. What journal entry would be made for the days worked and what entry would be made when t

School District: Encumbrance Accounting System

School District #25 formally integrates the budget into the accounting system and uses the encumbrance system. All appropriations lapse at year-end. At year-end, before closing entries, the district had the following balances in its accounts. All accounts had normal balances. (a) Prepare the necessary closing entries. (b)

Accounting controls for managed rental properties

Mel O'Conner owns rental properties in Michigan. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in local newspapers. The property managers transfer cash to O'Conner monthly and prepare their own bank reconciliations. The manager in Lansing has been stealing from the company. To c

Managerial Accounting Questions

1. What is the goal of the EOQ model? 2. Why does a firm hold "safety stock?" 3. What costs are a firm trying to balance when it decides on how much safety stock to hold? 4. What are some accounting changes that a firm should make if it decides to implement a JIT inventory management system? Why are those changes necessary?

Dividend from net income

150 word min This is not an assignment completion request. Regarding the topic adjustment of preferred dividend from net income in order to calculate EPS, would a cumulative vs non-cumulative preferred dividend make a difference in this adjustment?

Financial versus Managerial Accounting

Financial versus Managerial Accounting 1) What is your opinion on the questions below? It is time to explore the differences between financial and managerial accounting. Financial accounting is rule-oriented since the information is used to communicate with third parties. Managerial accounting, on the other hand is for inter

Stock spilt

This is not an assignment completion request. Stock splits and reverse splits are often a reflection of the economic times we live in. Could you find a recent real life example of a stock split or reverse split announced by a company?

Accounting - Income Taxes

Discuss the difference between half-year, mid-quarter, and mid-month conventions. What type of asset falls into each category and why do you think the IRS code has these different categories.

accounting

Presented below is information related to McKenna Company. Cost Retail Beginning inventory $ 60,600 $102,100 Purchases (net) 127,900 200,700 Net markups 23,000 Net markdowns 32,600 Sales 192,700 (a) Compute the ending inventory at retail. Ending inventory $

Debt situation

In a troubled debt situation, why might the creditor grant concessions to the debtor? b. What type of concessions might a creditor grant the debtor in a troubled debt situation? c. What is meant by "impairment" of a loan? Under what circumstances should a creditor or debtor recognize an impaired loan?

Bond Indebtedness and Maturity

Why would a company want to reduce its bond indebtedness before its bonds reach maturity? Indicate how this can be done and the correct accounting treatment for such a transaction.

Compute depreciation expense on the machine

The cost of equipment purchased by Charleston, Inc., on June 1, 2012, is $137,950. It is estimated that the machine will have a $7,750 salvage value at the end of its service life. Its service life is estimated at 7 years; its total working hours are estimated at 65,100; and its total production is estimated at 813,750 units. Du

Interest revenue of Bismarck

On July 31, 2012, Bismarck Company engaged Duval Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2012. To help finance construction, on July 31 Bismarck issued a $628,800, 3-year, 12% note payable at Wellington National Bank, on which inte

Nonprofit fund accounting: Restricted funds

Restricted funds for Nonprofit fund accounting: Can a nonprofit (not-for-profit) organization release restrictions on a "strike fund" and use it in the general fund for current year activity? Why or why not? If you knew that the strike fund was held for steel workers' union to pay benefits during a potential strike versus a

Activity Based Costing and Pricing

1. What is Activity Based Pricing? How can banks use it in their business? Explain. 2. How can banks link ABC to performance management? Explain. 3. How can ABC provide useful information on costs? Explain. 4. How is ABC useful in measuring customer profitability? Explain.

Business as hobby

Explain how a business can be classified as a hobby. Give examples of businesses that can be for profit-seeking or for personal pleasure.

Activity-based costing information

Jog Road Company's cost system assigns MSDA expenses to customers using a rate of 33% of sales revenue. The new CFO has discovered that Jog Roads's customers differ greatly in their ordering patterns and interaction with the company's sales force. Because the CFO believes Jog Road's cost system does not accurately assign MSDA ex

Beeline Manufacturing Activity Based Costing

Beeline Manufacturing produces two types of industrial ventilation machines: heavy-duty and standard. The assignment basis for overhead costs has always been direct labor hours. For 2013, Beeline compiled the following data for the two products: Heavy-duty Standard Sales in units 4,000 45,000 Sales price per unit

Managerial accounting question - overhead

Dear Expert I attach Word Doc. Please show me your work   Broward Manufacturing is a small textile manufacturer using machine-hours as the single, plant-wide predetermined cost driver rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the