1.
Question 1. What Is Accounting?
Answer
:
Accounting is a method or
system used to keep track of and determine the financial status of a person or
company's income/assets and outlay of money/possessions. (An Accountant engages
in Accounting: "The occupation of maintaining and auditing records and preparing
financial reports for a business").
2.
Question 2. Who Uses Accounting?
Answer
:
Taxpayers like to use
accounting.
3.
Question 3. What Are Accounting Principles?
Answer
:
The
Accounting Principles are the assertion rules of accounting and the application
of these rules, method, & procedures to actual practice of accounting.
These Accounting principles have been divided into
A. accounting concepts
B. accounting conventions.
4.
Question 4. What Are Accounting Entities?
Answer
:
Accounting entities are for
example a business do not get these mixed up with legal entities.
5.
Question 5. What Are The 4 Phases Accounting?
Answer
:
1.
Recording
2. Classifying
3. Summarizing
4. Interpreting.
6.
Question 6. What Are The Different Fields Of
Accounting?
Answer
:
There is one field of
accounting, but there are many different jobs within the field such as auditor,
bookkeeper, payroll accountant, cost accountant, tax accountants, etc.
Accountants wear many hats and often do different tasks for different clients.
7.
Question 7. What Are The Different Branches
Of Accounting ?
Answer
:
Financial accounting refers
to accounting for revenues, expenses, assets, and liabilities. It involves the
basic accounting processes of recording, classifying, and summarizing
transactions.
- Cost
accounting is the branch of accounting dealing with the recording,
classification, allocation, and reporting of current and prospective costs.
- Managerial accounting is the branch of accounting designed to provide
information to various management levels in the hospitality operation for
enhancing controls.
8.
Question 8. What Is Accounting Transaction?
Answer
:
A transaction is an
execution of a user program and is seen by the DBMS as a series or list of
actions. The actions that can be executed by a transaction include the reading
and writing of database.
9.
Question 9. What Are The Functions Of
Accounting?
Answer
:
Accounting involves the
creation of financial records of business transactions, flow of finance, the
process of creating wealth in an organization, and summarizing the financial
position of a business at a given moment in time.
10. Question
10. What Is Creative Accounting?
Answer
:
"Thinking outside the
box" when such practice is not permitted. Creative accounting is actually
a good description of the practice, as it tends to create a picture, which is
not technically correct from the perspective of the information's intended
user.
11. Question
11. What Is A Ledger In Regards To Accounting?
Answer
:
It is a complete set of
accounts for a business entity.
12. Question
12. What Is Accounting Management?
Answer
:
Accounting Management
(Business) is the practical application of management techniques to control and
report on the financial health of the organization. This involves the analysis,
planning, implementation, and control of programs designed to provide financial
data reporting for managerial decision-making. This includes the maintenance of
bank accounts, developing financial statements, cash flow, and financial
performance analysis. Accounting management is a mandatory knowledge module of
any MBA program.
Accounting (IT) management:
Accounting is often referred to as billing management. The goal is to gather
usage statistics for users.
Using the statistics the
users can be billed and usage quota can be enforced.
Examples:
* Disk usage
* Link utilization
* CPU time.
13. Question
13. What Is Use Of Statistics In Accounting?
Answer
:
Well, in many accounting
situations, there is too much data to go through all this. For example, if we
are looking about Ford motor corp., and looking at some specific data, their
may be too much to analyze, so we take a sample. Then we need to know how big a
sample to take so we can say with 95% confidence that our results are
representative of all the data.
Statistics tells us what
sample size we need.
14. Question
14. Why Are Accounting Standards Necessary?
Answer
:
Accounting standards are
necessary to promote high quality financial reporting. The fundamental role of
accounting is to communicate economic information about businesses and other
organization to various stakeholders including government, investors,
shareholders, suppliers, lenders, customers, and the public. These stakeholders
use such information to take decisions and to assess the stewardship of people
appointed to manage such organizations. If this information were not of a high
quality standard, then the stakeholders would be unable to take effective
decisions that will benefit them. For example, if a financial report were
manipulated to show higher profits, investors would hold on to their shares
with the belief that the company is doing well.
Accounting standards came
to be developed from the mid sixties onwards to promote the integrity of the
accounting profession by way of ensuring uniformity in the way accountants
report transactions in their books and in their preparation of the final
accounts of businesses. This is largely aimed at boosting the confidence of
stakeholders, particularly shareholders and potential investors in the
accounting profession.
Good and useful information
should have the essential characteristics of understandability, comparability,
relevance, and reliability in order to play its role effectively.
Accounting standards serve
to promote the understandability, comparability, relevance, and reliability of
financial reports.
15. Question
15. What Is Accounting Normalization?
Answer
:
It is removing items from
the income statement or balance sheet that do not normally occur during the
course of business to better estimate the value of a company.
16. Question
16. What Is Normative Accounting?
Answer
:
Normative Theory is a
theory that prescribes how a process of accounting should be done. This theory
is not based on observation and may suggest radical changes to current
practices in accounting.
17. Question
17. What Is Computerized Accounting?
Answer
:
Accounting is the method in
which financial information is gathered, processed, and summarized into
financial statements and reports.
The purpose of accounting
is to provide information used in decision-making. Accounting may be viewed as
a system (a process) that converts data into useful information.
Information
processes include:
o
Recording
o
Maintaining
o
Reporting
Every business has numerous
processes. Some are simple, others complex and cumbersome. However, as the
business grows, acquires new customers, enters new markets, and keeps pace with
constant changes in statutory regulations... the company will need to maintain
highly accurate and up-to-date accounting, inventory, and statutory records.
This is where a
computerized accounting helps simplify, integrate, and streamline all the
business processes, cost-effectively and easily.
18. Question
18. What Does The Abbreviation M Mean In Accounting?
Answer
:
It has come to mean one
million in general usage, although it used to mean one thousand (and one
million was abbreviated "MM")
19. Question
19. What Does The Abbreviation Dr Mean In Accounting?
Answer
:
'Dr' means Debere in Latin
stands for 'what comes in' or in simple words whatever assets the business owns
or the expenses it has to pay comes under debit.
While 'cr' means credere in
Latin means 'what goes out', in simple words whatever liabilities business
owns, or the income it earned during the year comes under credit.
20. Question
20. What Is Accounting Ethics?
Answer
:
Accounting ethics is
primarily a field of applied ethics, the study of moral values and judgments as
they apply to accountancy. It is an example of professional ethics.
21. Question
21. What Is An Accounting Transaction?
Answer
:
An accounting transaction
is the exchange of request/response messages to perform accounting. Accounting
can be performed in the form of accounting transactions that report on resource
usage by a session. Accounting transaction can occur during a session if
accounting or charging indications are needed [p&l based acct] or only at
the start and the end of the session.
22. Question
22. What Does Overhead Mean In Regards To Accounting?
Answer
:
It is to describe costs of
running a business, e.g. rent rates and salaries.
23. Question
23. What Are The Uses Of Journal In Accounting?
Answer
:
The journal is most
commonly used to record corrections to errors that have been made in writing up
the general ledger accounts.
24. Question
24. What Is Fiduciary Accounting?
Answer
:
Proper accounting for
property that is entrusted to the fiduciary acting under the conditions set
forth in a deed.
25. Question
25. What Is Fair Value Accounting?
Answer
:
Fair Value accounting is an
accounting term that requires a company to place a value on all of the assets
on its balance sheet that, it is the price at which the assets could be sold.
This is easy to do when the asset has a quoted market price. However, it is
often the case that there is no liquid market for an asset, and thus the
company has to make an estimate of fair value. When the marketplace is in
turmoil and illiquid, as it has been for much of 2008, companies are sometimes
forced to place a very low value on an asset, resulting in a substantial
markdown from the prior value. See related links for complete explanations.
26. Question
26. Is Financial Accounting Necessary?
Answer
:
Yes, the accounting
calculates the cost of capital to the business. It compares the current,
expected, and historic rates of return. Suppose a company is making 12% returns
but borrowing money by using the owner's credit card at 22% be good to know
that.
27. Question
27. What Are The Different Branches Of Accounting?
Answer
:
Following
are different branches of accounting:
o
Cost Accounting
o
Financial Accounting
o
Management Accounting
28. Question
28. What Is Account In Accounting?
Answer
:
A account is the method
used to visualize the debit credit accounting procedure. The account can
represent any account regardless of expense, revenue, asset, or liability. The
debits are placed the left side and the credits on the right.
29. Question
29. What Is An Ea In Accounting?
Answer
:
EA stands for Enrolled
Agent. It is a certification by the Internal Revenue Service given to those
qualified to practice before them. To become an EA, one must pass a test given
by the IRS, the purpose of which is to try to ensure that only qualified people
practice before the IRS. You may not be a Power of Attorney for the IRS unless
you are an EA or some other certified individual such as a CPA or an attorney.
30. Question
30. Why Do Users Of Accounting Information Need Accounting Information?
Answer
:
External
users of accounting information (especially investors) use accounting
information like annual and quarterly reports to base their investing decisions
on, and to compare different companies with one another.
Internal users of accounting (mostly managers) use internal accounting
information in order to plan.
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