Assume that you are a loan officer at a bank. A company has applied to your bank for a large loan to finance the development of new products. Does it matter whether the company is organized as a sole proprietorship, a partnership, or a corporation? Explain.
Briefly distinguish between financial and managerial accounting as they relate to (i) the primary users, (ii) the type and frequency of reports, (iii) the purpose of reports, and (iv) the content of reports.
Occasionally, public accounting firms are engaged to report on specified elements, accounts, and items of financial statements.
a. Discuss types of reports that may be provided for a nonpublic company for specified elements, accounts, and items of financial statements.
b. Why should reports on the application of agreed-upon procedures to information be restricted to specified users?
Which of the following statements does not describe a characteristic of management accounting?
A) Management accounting places a great deal of emphasis on the future.
B) Management accounting must conform to GAAP.
C) Management accounting is more concerned with individual segments of the organization rather than with the organization as a whole.
D) Approximate amounts rather than accurate amounts are often used in management accounting.
E) More than one of the above statements does not describe a characteristic of management accounting.
The process of a CPA obtaining a certificate and license in a state other than the state in which the CPA’s certificate was originally obtained is referred to as:
a. quid pro quo.
b. substantial equivalency.
c. re-examination.
d. relicensing.
