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

What is the primary difference between managerial accounting and financial accounting?

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

Managerial accounting prepares reports for shareholders, while financial accounting prepares reports for managers.

Financial accounting deals only with future projections, while managerial accounting deals only with past transactions.

Managerial accounting is regulated by GAAP, while financial accounting is not.

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Verified step by step guidance

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

Step 2: Analyze the regulatory framework. Financial accounting is governed by Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), ensuring consistency and comparability for external reporting. Managerial accounting is not regulated by GAAP, as it is tailored to the specific needs of internal users.

Step 3: Examine the type of reports generated. Managerial accounting produces detailed reports, such as budgets, forecasts, and performance evaluations, which are used internally. Financial accounting generates standardized financial statements, such as the income statement, balance sheet, and cash flow statement, for external stakeholders.

Step 4: Consider the time orientation of the information. Managerial accounting often focuses on future projections and planning, while financial accounting primarily deals with historical data to reflect the financial position and performance of an organization.

Step 5: Review the audience for the information. Managerial accounting serves internal users, such as department heads and executives, while financial accounting serves external users, such as shareholders, creditors, and regulatory bodies.