Accounting

1022 words 5 pages
Question 1:

* Proficient-level:

* There are several important functions performed in an organization, among which accounting is one of them. Define the accounting function and discuss how it differs from double-entry bookkeeping.
Answer: According to the Dictionary of Accounting Terms, Accounting is defined as a one step process of recording, measuring, interpreting and communicating financial data by preparing financial statements in order to reflect financial condition and operating performance whereas Double-entry bookkeeping is the record of transactions that require entries in at least two accounts. * What types of information are critical to the performance of the accounting function in an organization?
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* Distinguished-level: * Describe the four major types of internal management decisions that utilize management accounting information.
Answer: The four major types of internal management decisions are Financial decisions such as deciding what amounts of funds are needed in order to run a business, the second is resource allocation decisions such as deciding how the total capital of a company is to be invested, the third is Production decisions such as deciding what products are to be produced, by what means, and when, and the fourth is Marketing decisions such as setting selling prices and advertising budgets plus determining the location of a company’s market and how to reach them.

Question 4:

* Proficient-level: * In the development of financial accounting standards there are six organizations that are influential in the establishment of GAAP.
Answer: 1. Financial Accounting Standards Board (FASB) 2. Governmental Accounting Standards Board (GASB) 3. Securities and Exchange Commission (SEC) 4. American Accounting Association (AAA) 5. Financial Executive Institute 6. Institute of Management Accountants * Distinguished-level: * Each organization has contributed in a different way. Describe how each of the six organizations is involved in work

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