Intermediate Accounting Exam 1

Internal Users

• Managers

• Sales team

• Investors

• Creditors

• Government

External Users

• Managers

• Customers or Vendors

• Investors

• Creditors

• Government

Primary focus of financial accounting is:

• Providing financial information to external users

• Providing financial information to internal users

• Make sure books balance

• Make sure company follows rules

Money we owe to

• Creditors

• Investors

Buying/paying Company

• Creditors

• Investors

Recognizes revenue when the customer has paid us, and expenses when we have paid something

• Cash Basis

• Accrual Basis

Recognizes revenue when it is earned and expenses when they are incurred

• Cash Basis

• Accrual Basis

Publicly trades companies must use what in accordance to GAAP?

• Cash Basis

• Accrual Basis

set of rules and guidance for accounts to properly/correctly record transactions in the accounting system

• GAAP

• FASB

• SEC

• IASB

• GASB

Governmental agencies that regulate public companies. Congress gave ____ the power to regulate GAAP and select delegates for the FASB

• GAAP

• FASB

• SEC

• IASB

• GASB