Accounting and Financial Management questions and answers well illustrated.

Accounting and Financial Management questions and answers well illustrated. Stock Market & its efficiencies - correct answers.When the space shuttle exploded and they found the company responsible for it, the capital market found out within minutes As a result, this caused an immediate drop of the market share, showing that stock markets are extremely efficient Accountants vs Finance Professionals - correct answers.Accountants - measure, analyze and manage performance - they look back in time to understand how we progress in our business plan (make decisions based on info of the past) - they give feedback to management Finance Professionals - they look towards the future - they forecast the future to understand how businesses are going to perform and they optimize choices accoridngly - make decisions as whether they should buy or sell a share Audit - correct examination og a company's financial statements and the accounting practices that produced them make sure statements are in conformity with GAAPs (generally accepted account principles) Management accounting - correct answers.- Users INSIDE the organization - produce internal management reports that provide financial information on which decisions can be based for the future Financial accounting - correct answers.- users OUTSIDE the organization (NGO's, government, shareholders) - information that is primarily for external purposes (e.g. shareholders) managerial vs financial accounting - correct erial: provides managers and employees with the info needed to make decisions about a firm's financing, investing, marketing and operating activities (reflecting the past to determine the future) financial: generates financial statements and reports for interested people outside the organization. info is used to determine if the firm has reached their goals other types of accoutning - correct accounting (cost of producing certain goods/services) government accounting not-for-profit accoutning tax accounting (generates tax strategy) Who is involved in financing and accounting? LIST - correct answers.CORPORATE FINANCE - TREASURER (Finance & Internal) FINANCIAL MARKETS - ANALYST/PORTFOLIO MANAGER (Finance & External) MANAGEMENT ACCOUNTING - FINANCE MANAGER/CONTROLLER (Accountant & Internal) FINANCIAL ACCOUNTING - AUDITOR (Accountant & External) CORPORATE FINANCE - TREASURER (Finance & Internal) - correct answers.- manages the provision of money to be able to achieve corporate goals in the upcoming years - dealing with money form shareholder or debt-holder - handling a financial risk - reporting to the CEO - responsible for everything that has to do with finance FINANCIAL MARKETS - ANALYST/PORTFOLIO MANAGER (Finance & External) - correct answers.2 types of analysts: - BUY-SIDE analysts (usually works for a pension fund or mutual fund company) - SELL-SIDE analysts (works for a brokerage or firm that manages individual accounts and makes recommendations to the clients of the firm) Portfolio manager: decides whether to buy from stock X or stock Y MANAGEMENT ACCOUNTING - FINANCE MANAGER/CONTROLLER (Accountant & Internal) - correct answers.- providing monthly financial statements and explain how they should be analysed - decision about what kind of actions should be taken to make sure to be on the right track for investment FINANCIAL ACCOUNTING - AUDITOR (Accountant & External) - correct answers.- giving a public opinion whether a certain financial statement gives a true or fair view, also stating whether its possible to rely on certain numbers Primary statements - correct answers.These are statements in a set of annual accounts - shows how the business has performed over the past years - includes balance sheet, income statement and cash flow statement - the goals for next year Financial statements and their purpose - correct answers.Tool used to: - document the performance of a certain company - document the financial position of a certain company - hold management accountable for how a company is performing - determine how much money can be distributed to shareholders - make predictions - decide what to invest and divest - convinces BANKS to borrow money to a company - convinces SUPPLIERS to do business with a company Balance sheet & Income statement - correct ce sheet: a snapshot that displays the financial position of a company at a specific day income statement: shows the profit and loss of a company over a certain time period assets - correct nt assets - high liquidity; used in one year or less fixed assets - held for longer than 1 year; depreciation intangible assets - have value based on the rights or privileges they confer on a firm (usually long term assets such as patents. trademarks, brands) liabilities and equity - correct nt liabilities - paid in one year or less long-term liabilities - paid after 1 year or more equity - the amount of assets minus the amount of liabilities COGS in P&L - correct answers.Beginning inventory + net purchase - closing inventory gross profit = net sales - COGS Operating expenses - correct ng expenses + general expenses (all costs other than COGS)