Financial Accounting Fundamentals||Q&A 100% VERIFIED||LATTEST!!!

Financial Accounting Fundamentals Marco J. Malandra, CPA Learning Objectives 1. 2. 3. 4. 5. Language of Business: GAAP FS & CPA Audit The Format, Differences & Relationships of the FS The Logic of the Debit | Credit Chart The 3 Types of Entries & 2 Types of “Books” Chart of Accounts – 4 Characteristics for Each 3 Maxims of Financial Accounting What is the “Language of Business”? Identifying, measuring & communicating financial info about entities to interested parties. Types of accounting & main purposes include: Managerial – For Managers to better run their own Company Tax – For Taxpayers to prepare tax returns to fund Governments Forensic – For Litigants to use in Litigation (court Forensic – For Litigants to use in Litigation (court What’s the Focus of Financial Accounting? Public Co. FS Preparation CPA Audit & FS Issue to SEC (Form 10-K) Investor Decision Usefulness Main focus is preparation of financial statements (FS) for Investors: • Public Co. FS must be prepared in accordance with GAAP • US GAAP is currently written by FASB (under SEC authority) • US GAAP is organized by topic, on-line, in FASB’s Codification • IASB writes IFRS, International GAAP, used in How do CPAs help the Economy – the Public? CPAs help insure that a public Co. FS fairly represents its financial condition, allowing investors to invest in “best” firms, those making best use of limited resou