Solutions for Financial and Managerial
Accounting, 9th Edition
What is the accounting equation? - ANSWERSAssets = Liability + Owners' Equity
Please explain the 3 parts of the accounting equation - ANSWERSAssets = Cash, Accounts
Receivable (AR), trademarks/patents, investments
Liabilities = claims by debtors, Accounts Payable (AP)
Equity = claims by the owner
Debit is always on the _________ and Credit is always on the _________. - ANSWERSDebit is on
the LEFT and credit is on the RIGHT.
Who is the "father of accounting" and in what year did he publish his book? - ANSWERSLuca
Pacioli
Summa de arithmetica - 1494
Why do we need accounting? - ANSWERSTo discover financial inconsistencies, fraud
Analyze and predict budgets
Compare different companies' financial reporting and performance
Define "accounting" - ANSWERSA way of recording, analyzing and summarizing transactions of a
business.
What is the "language" of accounting? - ANSWERSDouble entry bookkeeping
,What is the idea of double entry? - ANSWERSThe idea is that each entry is written down twice -
Debit and Credit
What are the three main steps of accounting? - ANSWERS1. Recording the information
2. Ledgers
3. Financial statements
Cost and management accounting is concerned with providing management information
concerning what? - ANSWERS1. Planning
2. Control
3. Making decisions
What are some of the roles of Managerial Accounting? - ANSWERSCost accounting
Budgeting
Making management decisions
Evaluating performance
Budgeting for capital costs and making decisions
Price formation
What are some of the roles of Managing Finance? - ANSWERSPlanning and managing cash
flows, including currency flows
Long-term financing decisions
Managing financial risks
Financing for investments
Managing working capital
, What are some of aspects of preparing financial statements? - ANSWERSFinancial reports
Tax reports and calculations
Providing other info. for external users
Who are the users of information of FA? - ANSWERSShareholders, investors, banks, suppliers,
credit institutions, tax collectors, company employees and other EXTERNAL users
Who are the user of information of MA? - ANSWERSManagement of different levels WITHIN the
company - president, shop foreman, etc.
What regulation(s) must be followed in FA? - ANSWERSAccounting is strictly regulated by
external standard such as IFRS.
What regulation(s) must be followed in MA? - ANSWERSThe managers themselves decide the
accounting methods.
What degree of accuracy in required in FA? - ANSWERSThe data must be fair and accurate.
What degree of accuracy in required in MA? - ANSWERSApproximate values are acceptable as
long as they are sufficient for management decisions.
What is the scope of accounting in FA? - ANSWERSActivities of the ENTIRE organization
What is the scope of accounting in MA? - ANSWERSWhatever the manager decides - separate
segments, areas of production, subdivisions, market areas
What are the measures of accounting information in FA? - ANSWERSCost and monetary
Accounting, 9th Edition
What is the accounting equation? - ANSWERSAssets = Liability + Owners' Equity
Please explain the 3 parts of the accounting equation - ANSWERSAssets = Cash, Accounts
Receivable (AR), trademarks/patents, investments
Liabilities = claims by debtors, Accounts Payable (AP)
Equity = claims by the owner
Debit is always on the _________ and Credit is always on the _________. - ANSWERSDebit is on
the LEFT and credit is on the RIGHT.
Who is the "father of accounting" and in what year did he publish his book? - ANSWERSLuca
Pacioli
Summa de arithmetica - 1494
Why do we need accounting? - ANSWERSTo discover financial inconsistencies, fraud
Analyze and predict budgets
Compare different companies' financial reporting and performance
Define "accounting" - ANSWERSA way of recording, analyzing and summarizing transactions of a
business.
What is the "language" of accounting? - ANSWERSDouble entry bookkeeping
,What is the idea of double entry? - ANSWERSThe idea is that each entry is written down twice -
Debit and Credit
What are the three main steps of accounting? - ANSWERS1. Recording the information
2. Ledgers
3. Financial statements
Cost and management accounting is concerned with providing management information
concerning what? - ANSWERS1. Planning
2. Control
3. Making decisions
What are some of the roles of Managerial Accounting? - ANSWERSCost accounting
Budgeting
Making management decisions
Evaluating performance
Budgeting for capital costs and making decisions
Price formation
What are some of the roles of Managing Finance? - ANSWERSPlanning and managing cash
flows, including currency flows
Long-term financing decisions
Managing financial risks
Financing for investments
Managing working capital
, What are some of aspects of preparing financial statements? - ANSWERSFinancial reports
Tax reports and calculations
Providing other info. for external users
Who are the users of information of FA? - ANSWERSShareholders, investors, banks, suppliers,
credit institutions, tax collectors, company employees and other EXTERNAL users
Who are the user of information of MA? - ANSWERSManagement of different levels WITHIN the
company - president, shop foreman, etc.
What regulation(s) must be followed in FA? - ANSWERSAccounting is strictly regulated by
external standard such as IFRS.
What regulation(s) must be followed in MA? - ANSWERSThe managers themselves decide the
accounting methods.
What degree of accuracy in required in FA? - ANSWERSThe data must be fair and accurate.
What degree of accuracy in required in MA? - ANSWERSApproximate values are acceptable as
long as they are sufficient for management decisions.
What is the scope of accounting in FA? - ANSWERSActivities of the ENTIRE organization
What is the scope of accounting in MA? - ANSWERSWhatever the manager decides - separate
segments, areas of production, subdivisions, market areas
What are the measures of accounting information in FA? - ANSWERSCost and monetary
