Questions 1-18, Mini exercise M1-1 thrue M1-3. E1-3, E-5, E-6, E-8, E-9, E-11, P1-1
1) it is a system that processes and collect financial info. About the org. and presents that info. To the decision makers.
2) *Financial accounting is focus in the external decision makers and prepare 4 financial statements. *Managerial accounting is information more detailed for internal use, which reports to the owners about the conditions and transactions of the company.
3) The internal group are the managers or personal which is inside the company and the external group is composed of the investors and creditors and agencies who has any kind of interest in the company.
4) Investor are those who own a share in the company, who put money to buy supplies or equipment and receive earnings from the company, the creditors are entities who give a loan to the company and just charge interest for a period of time until the company paid it.
5) It is the organization of which the financial data belongs. Because it is necessary to separate to evaluate the performance of the specific business.
6) Complete the following:
a. Income statement……… Statement of operation
b. Balance sheet………….. Statement of financial Position
c. Audit report……………... Report of independent Account
7) Name of the entity, Title of the statement, specific date of the statement, unit of measure.
8) What is the purpose of the following:
a) Income statement: Shows information about the revenues, expenses, and the net income for a specific period.
b) Balance sheet: shows information of the assets and the number has to be equal to the liabilities and the stockholders equity.
c) Statement of cash flow: show information about the cash in and out of the entity during an specific period.
9) Because the balance sheet is for that specific period of time, and the income statement and the statement of cash flow is reflecting data for the whole year.
10) The assets represent what the company belong at the moment, the liabilities what the company has to pay to others entities and shows if the company is producing enough money to pay those bills.
11) Net income, is the profit or