How do public accountants differ from management accountants? Who are the key users of the accounting information? What type of information does each stakeholder group need?
Financial statements are prepared using generally accepted accounting principles (GAAP). What group is responsible for establishing these principles, and what goals guide their formulation? Why are many generally accepted accounting principles likely to change in the future?
State the accounting equation and define each of its terms. What elements contained on a balance sheet? How is this structure related to the accounting equation?
You have a company’s balance sheet, its income statement, and its statement of cash flows. Which would you refer to in the following situations:
If you wanted to know if a company made a profit last year.
If you wanted to fin out whether the firm had any intangible assets.
If you wanted to know why its cash balance had changed over the past year.
If you wanted to know how much debt the firm had used to finance its assets.
If you wanted to know what the firm’s operating expenses were for the past year.
Describe the three basic categories of cash flows reported by a statement of cash flows. Give examples of specific cash flows in each category.
Identify and describe the basic elements of an income statement. Explain how the accrual basis of accounting guides the way information on the income statement is reported.
What is the purpose of an external audit by an independent CPA firm? How does an auditor go about conducting an audit?
What is the purpose of budgeting? What is the master budget, and what are its major components? How does a top down budgeting process differ from a bottom up approach, and what are two advantages and two disadvantages of each.
Describe the key differences between financial accounting and managerial accounting.
How do management accountants view cost? How do implicit costs differ from explicit costs? Give two examples to illustrate the difference.
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