Intermediate Accounting Chapter 1 - Exam 1 Questions With 100% Correct Answers

Intermediate Accounting Chapter 1 - Exam 1 Questions With 100% Correct Answers The balance sheet, the income statement, the statement of cash flows, and the statement of owners' or stockholders' equity. - answerWhat are the four main financial statements? Accounting provides relevant, reliable, and timely information to managers, investors, and creditors to allow resource allocation to the most efficient enterprises. Accounting also provides measurements of efficiency and financial soundness. - answerHow does accounting assist in the efficient use of scarce resources? Financial, managerial, tax, audit, accounting information systems. - answerWhat are the main areas of accounting? Investors and Creditors. - answerWho are the primary users of financial statements? Financial accounting is the process that prepares a firm's financial reports for use by both internal and external parties and managerial accounting is the process of identifying, measuring, analyzing, and communicating financial info needed by management. - answerWhat is the difference between financial accounting and managerial accounting? Stockholder's/Investors and creditors. Others include government agencies, employees, consumers, financial intermediaries, suppliers, labor unions, and auditors. - answerWho are the external user groups that use financial accounting statements? Financial statements, annual reports, prospectuses, reports filed with the SEC and other government agencies, news releases and management forecasts, and social or environmental impact statements. - answerWhat is included in financial reporting? Entity Perspective - answerUsing this perspective, companies are viewed as separate and distinct from their owners. Decision-Usefulness - answerInvestors are interested in assessing the company's (1) ability to generate net cast inflows and (2) management's ability to protect and enhance the capital providers' investments.