What is the meaning of prundence concept?
Answers: Prudence concept:
If a situation arises where there are two acceptable alternatives for reporting an item, prudence directs the accountant to choose the alternative that will result in less net income and/or less asset amount. Prudence helps the accountant to "break a tie." It does not direct accountants to be prudent. Accountants are expected to be unbiased and objective.
The basic accounting principle of prudence leads accountants to anticipate or disclose losses, but it does not allow a similar action for gains. For example, potential losses from lawsuits will be reported on the financial statements or in the notes, but potential gains will not be reported. Also, an accountant may write inventory down to an amount that is lower than the original cost, but will not write inventory up to an amount higher than the original cost.
What is the difference between Financial Accounting and Managerial Accounting?
Does this imply that nearby are two different accounting systems being followed? Can some accountants working for a firm be designated as financial or executive accountants, or are they all simply accountants? Does one accountant carry out both financial and managerial functions? Explain and supportAnswers: You may execute the functions of both if your factory is a small one, but if it's a huge one you might have both accountants surrounded by the same company. Financial accounting and paperwork accounting both prepare and analyze financial data. However, in no doubt aspects of these two fields are terrifically different. The various differences include the users of information, the types of information, regulatory oversight, and frequency of reporting.
Users of Information
Financial accounting and paperwork accounting provide information to two different user groups. Financial accounting primarily provides information for external users of accounting data, such as investors and creditors. On the other paw, management accounting provides information for internal users of accounting information. Internal users include employees, manager, and executives of the company.
Types of Information
The type of information required by the different user groups also differs. External users primarily rely on financial information about the company. They analyze this information surrounded by conjunction with standard economic information, such as information going on for the industry in which the company operate. External users focus on broad information that reveals the overall performance of the company as a unbroken. In addition, financial accounting individual reports information on financial transactions that have occur in former times.
Internal users need to review financial information nearly the company, such as financial statement information. They also use non-financial information about the company, such as customer gratification levels and competitor facts. Internal users focus on detailed information that reveals the performance of picky subunits of the company, such as divisions or departments. In addition, headship accounting concentrates on past and present information, as economically as the forecasting of future financial transactions.
Regulatory Oversight
In charge to protect public interest, financial accounting is regulated by the Securities and Exchange Commission (SEC), the Financial Accounting Standards Board (FASB), and the Public Company Accounting Oversight Board (PCAOB). In contrast, management accounting is not regulated by any specific agencies. This is because the information provided by control accounting is intended for internal users only and is not available to the public. Therefore, since at hand is no public interest, there is no have need of to protect public interest regarding this information.
Frequency of Reporting
The focus of financial accounting is reporting on historical information. The information is reported periodically. It is repeatedly broken down into monthly, quarterly, and annual reporting periods. At a minimum, financial accounting information must be reported annually.
On the contrary, nouns accounting information is reported continually. Internal users need to evaluate previous, present, and potential future information surrounded by order to fashion decisions. Therefore, these users continuously requirement information in lay down to make the appropriate decision.
Financial accounting has more to do next to reporting the company's financial data surrounded by accordance with GAAP. Managerial accounting is adjectives about internal cost analysis.
Like someone else said, a substantial company would have copious accountants with different duties and a unbelievably small company may have one personage who does everything.
Is within an auction website for business plans for investors?
Is there an auction website for business plans for investors?someone told me of a site where on earth you post your business idea or plan and investors bid on the perception. like the ebay of business plans. haha anyone know what i'm chitchat about?
Answers: This can't be true because thinking cannot be patented and are not capable of mortal owned, so if you post your idea, anyone who like it can steal it and use it as their own without any repercussions. If in that is such a website, it's a scam.