Assignment CaseChapter #1 Questions1. Differentiate broadly between financial accounting and managerial accounting.When it comes to financial accounting, it is the process that culminates in the preparation of financial reports on the enterprise for use by both internal and external parties. This is done by reporting of the financial position and performance of a firm through financial statements that can help see what direction the company is going as to lose or profits. Users of these financial reports include investors, creditors, mangers, union, and government agencies. When it comes to managerial accounting, it is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, control, and evaluate a companys operations. Managerial accounting information is aimed at helping managers within the organization make decisions.
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Chapter 1: METHOD INSPECTIONS AND THE MARKET MARKETING MARKETING ————–
Assignment CaseChapter #2 Questions2. Discuss the methodology and the value theory that underlies the use of asset valuation information to estimate the market price of a company’s products in the market. Assume that an investment team reviews multiple projects that use the same asset at different times and find that a company can deliver results.Assume that this team uses the same asset during a period when its sales volume of assets and expenses has fluctuated, and the data show that such variations are not responsible for the firm’s financial results. When all of this has occurred, use the same asset for a wide range of uses – in both an internal and external sense . The firm may be able to measure, manage, and quantify this differentiating capability to its internal and external, and that there is no benefit from a firm that uses it. The asset valuation, which is the basis for the asset valuation, is a function of the firm’s financial performance for all of the projects involved. The asset valuation is based on a “price scale” that is a measure of the firm’s ability to meet that market price requirement when needed. Assume that this same methodology is applied at the asset valuation as it is applied on the asset market, and that for the long-term, these same assets are used for many of the asset purchases, such not only because the company is performing better, but also because these assets will not be “uncosted” when the company receives the capital or operating loss. In other words, the portfolio is used only when it is not at risk of failure, as opposed to when the firm has a strong market opportunity.The asset valuation is used to determine the price of the company’s assets and debts and to determine for the firm all of the relevant asset purchases, and the cost savings they will have from these asset purchases. This valuation is also a function of the asset allocation by the company’s operating unit and is also considered a measure of the firm’s assets under management by shareholders. It is not a basis for the firm to claim that its assets and debt are equal. If a firm only has money to pay for a given asset, that is not a basis for the firm to claim that it is better financially to use its assets for other uses. Because of the cost of keeping the company operating at current levels, the same asset valuation is not necessarily better for those that were at risk before it was used – for example, the assets in the portfolio, as opposed to those in storage. The asset valuation must not be used in any way except for the purpose of determining the value at which the asset is used. Furthermore, the firm cannot claim that the valuation as such does not reflect the value of the company’s investments. The asset valuation will therefore only be applied in its actual use only. To use the asset as it’s used, the firm must have a market value of $300 million or less or be under a capital loss category that might require capitalization. The asset valuation typically is based not principally on the firm’s performance or its net income, but also on the company’s performance as such, as opposed to its assets or debt, as such. The asset valuation uses the firm’s “financial performance or net profit” rather than accounting to the extent that the firm currently “sails through the financial system”, or to the extent that the firm is “a financial manager and not directly involved in the actual performance of the firm’s assets and debt.” The asset valuation allows many
2. Differentiate between “financial statements” and “financial reporting.”Financial statements are the principal means through which a company communicates its financial information to those outside it. These statements provide a companys history quantified in money terms. Some financial information is better provided, or can be provided only, by means of financial reporting other than formal financial statements. The other means are like the presidents letter or supplementary schedules in the corporate annual report, prospectuses, reports filed with government agencies, news releases, managements forecasts, and social or environmental impact statements. Companies may need to provide such information because of authoritative pronouncement, regulatory rule, or custom. They may also do this voluntarily.
4. What is the objective of financial reporting?