Intermediate Accounting 1: Exam 1 Chapter 1 and 2 Questions and Answers 100% Correct

Intermediate Accounting 1: Exam 1 Chapter 1 and 2 Questions and Answers 100% CorrectIntermediate Accounting 1: Exam 1 Chapter 1 and 2 Questions and Answers 100% CorrectIntermediate Accounting 1: Exam 1 Chapter 1 and 2 Questions and Answers 100% Correct Describe the function and primary focus of financial accounting - ANSWER-PRIMARY OBJECTIVE: to provide investors and creditors with useful information for decision making -provides information to predict the future risk and potential return of their prospective investments or loans -"Special" language used to communicate financial information to help people inside and outside of the business to make decisions -provides useful information about economic activity to help produce more good decisions and foster a prosperous society -by providing key information to capital market participants, it also plays a VITAL role that helps society's resources to the companies that will utlize those resources most effectively What is the primary focus of financial accounting? - ANSWER-chiefly concerned with providing financial information to various external users *Primary Focus* on the information needs of investors and creditors external user groups: financial intermediaries, financial analysts, stock brokers, mutual fund managers, and credit rating organizations financial statements most frequently provided - ANSWER-1. balance sheet (statement of financial position) 2. the income statement (statement of operations)