Accounting
cristyfranco1
accounting_wk1.docxPrepare solutions for Chapter 1 for the following: Exercise 1-4; 1-6; 1-7; 1-9; Critical Thinking Case 1-5
1-4 Generally Accepted Accounting Principles
Generally accepted accounting principles play an important role in financial reporting.
a. What is meant by the phrase generally accepted accounting principles?
b. What are the major sources of these principles?
c. Is there a single comprehensive list of generally accepted accounting principles? Explain.
d. What types of accounting reports are prepared in conformity with generally accepted accounting principles?
1-6 Investment return
You recently invested $18,000 of your saving in a security issued by a large company. The security agreement pays you 6 percent per year and has a maturity three years from the day you purchased it. What is the total cash flow you expect to receive from this investment, separated into the return on your investment and the return of your investment?
1-7 Accounting Terminology
Management accounting: (c)
Financial reporting:
Financial statements: (a)
General-purpose information: (h)
Integrity:
Internal control: ( e )
Public accounting:
Bookkeeping: (d)
1-9 Financial and Management Accounting
The major focus of accounting information is to facilitate decision making.
a. As an investor in a company, what would be your primary objective?
b. As a manger of a company, what would be your primary objective?
c. Is the same accounting information likely to be equally useful to you in these two different roles?
1-5 Critical thinking Case: Accessing Information on the Internet
a. The largest U.S. accounting firms are referred to as the Big 4-Deloitte, EY, KPMG, and PwC. Find the internet sites of these four firms and learn what you can about the types of services provided by the firm.
b. The Public Company Accounting Oversight Board (PCAOB) was created by the Sarbanes-Oxley Act to oversee auditors of public companies. Find the PCAOB’s Internet sight and learn what you can about the PCAOB’s four major activities.
c. The Financial Accounting Standards Board (FASB) is the designated accounting standard setter in the U.S. Find the FASB’s board members including a brief description of their background.
d. The International Accounting Standard Board (IASB) is the body that issues International Financial Reporting Standards. Find the IASB’s Internet site and identify the IASB’s board members including a brief description of the background of five board members.
