The process that culminates in the preparation of financial reports on
the enterprise for use by both internal and external parties ~CORRECT
ANSWER~✓✓Financial accounting
The process of identifying, measuring, analyzing, and communicating
financial information needed by management to plan, control, and
evaluate a company's operations ~CORRECT ANSWER~✓✓Managerial
accounting
What are the 4 types of financial statements? ~CORRECT
ANSWER~✓✓1. Balance sheet
2. Income statement
3. Statement of cash flows
4. Statement of owners or stockholders equity
Examples include the president's letter or supplementary schedules in
the corporate annual report, prospectuses, reports filed with
government agencies, news releases, management's forecasts, and
social or environmental impact statements ~CORRECT
ANSWER~✓✓Financial reporting
,The financial information a company provides to help users with capital
allocation decisions about the company ~CORRECT
ANSWER~✓✓Financial reporting
Investors and creditors use financial reports to make their capital
allocation decisions ~CORRECT ANSWER~✓✓Users
The process of determining how and at what cost is allocated among
competing interests ~CORRECT ANSWER~✓✓Capital allocation
What are the 3 steps of the Cost Allocation Process? ~CORRECT
ANSWER~✓✓1. Financial reporting
2. Users
3. Capital allocation
What is the objective of financial reporting? ~CORRECT
ANSWER~✓✓To provide financial information about the reporting
entity that is useful to present and potential equity investors, lenders,
and other creditors
Provide financial reporting information to a wide variety of users
~CORRECT ANSWER~✓✓General-purpose financial statements
Provide at the least cost the most useful information possible
~CORRECT ANSWER~✓✓General-purpose financial statements
, Identifies investors and creditors as the primary users for general-
purpose financial statements ~CORRECT ANSWER~✓✓The objective
of financial reporting
A perspective of general-purpose financial reporting where companies
are viewed as separate and distinct from their owners or present
shareholders ~CORRECT ANSWER~✓✓Entity perspective
A perspective of general-purpose financial reporting that is focused only
on the needs of the shareholders ~CORRECT ANSWER~✓✓Proprietary
perspective
An approach used when investors are interested in financial reporting
because it provides information that is careful for making decisions
~CORRECT ANSWER~✓✓Decision-usefulness approach
Ensures that a company records events that change its financial
statements in the periods in which the events occur, rather than only in
the periods in which it receives or pays cash ~CORRECT
ANSWER~✓✓Accrual-basis accounting
Companies prepare these to meet the needs, and to satisfy the
stewardship reporting responsibility of management ~CORRECT
ANSWER~✓✓General-purpose financial statements
the enterprise for use by both internal and external parties ~CORRECT
ANSWER~✓✓Financial accounting
The process of identifying, measuring, analyzing, and communicating
financial information needed by management to plan, control, and
evaluate a company's operations ~CORRECT ANSWER~✓✓Managerial
accounting
What are the 4 types of financial statements? ~CORRECT
ANSWER~✓✓1. Balance sheet
2. Income statement
3. Statement of cash flows
4. Statement of owners or stockholders equity
Examples include the president's letter or supplementary schedules in
the corporate annual report, prospectuses, reports filed with
government agencies, news releases, management's forecasts, and
social or environmental impact statements ~CORRECT
ANSWER~✓✓Financial reporting
,The financial information a company provides to help users with capital
allocation decisions about the company ~CORRECT
ANSWER~✓✓Financial reporting
Investors and creditors use financial reports to make their capital
allocation decisions ~CORRECT ANSWER~✓✓Users
The process of determining how and at what cost is allocated among
competing interests ~CORRECT ANSWER~✓✓Capital allocation
What are the 3 steps of the Cost Allocation Process? ~CORRECT
ANSWER~✓✓1. Financial reporting
2. Users
3. Capital allocation
What is the objective of financial reporting? ~CORRECT
ANSWER~✓✓To provide financial information about the reporting
entity that is useful to present and potential equity investors, lenders,
and other creditors
Provide financial reporting information to a wide variety of users
~CORRECT ANSWER~✓✓General-purpose financial statements
Provide at the least cost the most useful information possible
~CORRECT ANSWER~✓✓General-purpose financial statements
, Identifies investors and creditors as the primary users for general-
purpose financial statements ~CORRECT ANSWER~✓✓The objective
of financial reporting
A perspective of general-purpose financial reporting where companies
are viewed as separate and distinct from their owners or present
shareholders ~CORRECT ANSWER~✓✓Entity perspective
A perspective of general-purpose financial reporting that is focused only
on the needs of the shareholders ~CORRECT ANSWER~✓✓Proprietary
perspective
An approach used when investors are interested in financial reporting
because it provides information that is careful for making decisions
~CORRECT ANSWER~✓✓Decision-usefulness approach
Ensures that a company records events that change its financial
statements in the periods in which the events occur, rather than only in
the periods in which it receives or pays cash ~CORRECT
ANSWER~✓✓Accrual-basis accounting
Companies prepare these to meet the needs, and to satisfy the
stewardship reporting responsibility of management ~CORRECT
ANSWER~✓✓General-purpose financial statements
