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: 10,815

Income Statements and Profitability Ratios

In this assignment, you will use this information to create an income statement and then analyze it for profitability. Selected accounts for Jackson, Inc. are listed below along with their balances before closing the year of 12/31/12. Jackson, Inc. is a firm that manufactures wireless mouse systems for laptops. Use this informa

Cash Flow Statement Interrelationship

Discuss the interrelationship of the cash flow statement to the other financial statements. In your discussion comment and explain operating activities, investing activities, and financing activities. What is the difference between an indirect and a direct cash flow statement? Which is GAAP?

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

Accounting for Bonds Payable

Volker Inc. issued $2,832,000 of convertible 10-year bonds on July 1, 2012. The bonds provide for 12% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $31,200, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 8 shares o

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

Looking at Inventory Costing Methods

Using FIFO, LIFO, and the weighted average method, determine the gross profit, cost of goods sold, and cost of ending inventory. Use the form provided for your answers. Data below represents the purchases in August of Item ABC for Golson Company. Assume the company sold 1 unit during the month at a selling price of $50. D

Adjusting journal entries for a company

Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $75,800 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after

Western Bank & Trust: Depreciation

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