Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following best describes a key difference between managerial accounting and financial accounting?

Managerial accounting focuses on providing information for internal decision-making, while financial accounting focuses on providing information to external users.

Managerial accounting is governed by Generally Accepted Accounting Principles (GAAP), while financial accounting is not.

Financial accounting reports are typically prepared for specific projects or departments, while managerial accounting reports are for the entire organization.

Managerial accounting is only concerned with historical data, while financial accounting emphasizes future projections.

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Verified step by step guidance

Step 1: Understand the definitions of managerial accounting and financial accounting. Managerial accounting focuses on providing information to internal users, such as managers, to aid in decision-making. Financial accounting, on the other hand, provides information to external users, such as investors, creditors, and regulatory agencies.

Step 2: Analyze the governing principles. Financial accounting is governed by Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), ensuring consistency and comparability. Managerial accounting is not bound by GAAP and is more flexible to meet internal needs.

Step 3: Examine the scope of reports. Financial accounting typically prepares reports for the entire organization, such as income statements, balance sheets, and cash flow statements. Managerial accounting often focuses on specific projects, departments, or segments within the organization.

Step 4: Consider the focus on data. Managerial accounting uses both historical data and future projections to assist in planning and decision-making. Financial accounting primarily emphasizes historical data to provide a snapshot of the organization's financial position.

Step 5: Evaluate the purpose of the information. Managerial accounting is tailored to internal decision-making processes, while financial accounting aims to provide standardized information for external stakeholders to assess the organization's financial health.