What is an externality, and why do financial accounting practices typically ignore externalities?
Q: Which one of the following statements is not correct regarding financial accounting and management…
A: Financial Accounting - This is a branch of accounting under which business transactions are recorded…
Q: What are the benefits of generally accepted accounting principles (GAAPs)?
A: GAAP stands for Generally Accepted Accounting Principles.
Q: What are the basic foundation of Accounting?
A: Accounting: Accounting is the practice of documenting financial transactions that occur in the…
Q: How do you find gross profit in financial accounting?
A: Gross profit is the income earned by the company after deducting the cost of goods sold from the…
Q: how will a change from cash basis accounting to accural basis accounting positively and negatively…
A: Books of accounts can be maintained either using the cash basis accounting or using the accrual…
Q: Financial accounting serves what purpose
A: Introduction : Financial accounting The process of preparing financial statements, which comprise…
Q: Who are the primary users of financial accounting information?
A: Primarily there are 2 types of users of financial accounting information: Internal users External…
Q: Which of the following is not an external user of a business’s financial information? Taxing…
A: The financial information of the company is used by many internal & external users for getting…
Q: What is the function and primary focus of financial accounting?
A: Accounting: It is a systematic process of recording the financial transactions of an organization…
Q: What is information asemmytry? Why is it considered a problem to the financial system?
A: Information asymmetry is simply the imbalance of information between the trade participants i.e. one…
Q: What do you mean by materiality concept in accounting?
A: Materiality concept:Materiality concept refers to a condition wherein, the financial information of…
Q: Why is financial reporting important?
A: Financial reporting refers to the practices whereby companies report the financial statement. These…
Q: what is the Judgement Traps in accounting?
A: Judgment trap is also known as judgment triggers which refers to the inherited issue that leads…
Q: What are the two primary functions of financial accounting?
A: Financial accounting is that field of accounting in which all financial transactions are recorded in…
Q: What is the FASB’s Conceptual Framework? What are the objectives of financial reporting? What…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Is there a type of accounting that is not financial accounting?
A: Yes, there are two type of accounting which is not a financial accounting.
Q: Why do you think providers of finance are interested in a company's accounting information?
A: Finance means a money management system like Borrowing money, investing money, expenses money,…
Q: What are the problems encountered by the financial system? What is/ are assessment to these…
A: The group of institutions like banks, insurance companies, mutual funds, stock exchanges, etc. that…
Q: Why is it important to understand how to analyze financial statements?
A: Financial statements include income statement, cash flow statements, balance sheet and notes to…
Q: What is meant by “economic Consequences” in accounting standard-setting
A: Definition: Financial accounting standards board (FASB): This is the organization that creates,…
Q: what is the difference between finance and accounting?
A: Finance means the management of assets and liabilities of a business organisation to focus upon…
Q: Which of the following is a major challenge facing the accounting profession? O A. Accounting for…
A: Major challenges facing the accounting profession are :- Non financial measurements Forward looking…
Q: What are opportunity costs? Explain why opportunity costs are not recorded in financial accounting…
A: Opportunity cost is the value or benefit of the next best alternative given up when making a choice.…
Q: What are the different assumptions of Accounting principles?
A: Accounting assumptions provide a fundamental base and structure to record business transactions.The…
Q: what is the link between compliance with standards and the value of the firm's accounting and…
A: Accounting standards are prepared under the supervision of the Accounting Standard Board. Each and…
Q: Why Are Financial Accounting and Bookkeeping So Different?
A: The bookkeeping is recording the transactions and accounting is process to classify, record the…
Q: What is a conceptual framework, and how does one create one? In financial accounting, why is a…
A: Conceptual Framework: A conceptual framework logically explains related goals and foundations;.bu1Z…
Q: In finance, how essential is accounting?
A: Accounting is recording of the transactions occurring in the company. Accounting is very essential…
Q: Explain why a regulatory framework is necessary in financial accounting.
A: The term regulatory framework in accounting refers to the set of rules and regulations that are…
Q: What is information asymmetry? Why is it considered a problem to the financial system?
A: Information spatiality could be a condition in social science wherever one party has higher…
Q: What are the arguments favoring the regulation of financial reporting?
A: Financial reporting: Financial reporting is the procedure to communicate the information obtained…
Q: what are the reasons financial accounting standards inspire or encourage political action and…
A: The financial accounting standards are used while accounting by all the entities which are required…
Q: How does the concept of consistency aid in the analysis of financial statements? Why type of…
A: General accepted accounting principles means those set of standards which is followed while…
Q: What does the concept of objectivity imply for information reported in financial statements?
A: Accounting is a system of information that collects the data, process it and present the data in a…
Q: Why accounting is an infromation system? Explain with your own point of view with example.
A: Accounting Information Systems helps to perform the tasks in the job of Budget Analysis. An…
Q: fer from o
A: Revenue should be recognised when it is generated, not when it is received, according to the revenue…
Q: Why does the Accounting system used for financial statement preparation not always provide the…
A: Management needs detailed information for making a decision. Many times accounting systems do not…
Q: Is externally reported financial information always preciseand accurate?
A: Financial Accounting: It refers to the process of recording the financial transactions of the…
Q: In general, what is the conceptual framework that underlies accounting principles?
A: Accounting principles are the specific rules and guidelines that are to be followed in preparation…
Q: What difficulties do differences in accounting standards create for investors?
A: Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: What are the difficulties associated with the financial system and how these challenges can be…
A: Financial system is undergoing a significant change with the advancement of technology. It has…
What is an externality, and why do financial accounting practices typically ignore externalities?
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Solved in 2 steps
- what is the Judgement Traps in accounting?What is meant by generally accepted accounting principles,and how do these principles add to the integrity of financialaccounting information?What is the historical cost principle and how does it impact financial reporting? Provide an example of how the historical cost principle might lead to distorted financial statements.
- Why is financial reporting important?What are the different types of accounting theories, and how do they differ from each other? Discuss the strengths and weaknesses of each type of theory.How do accounting standards and regulations (such as GAAP or IFRS) impact financial reporting? What is the purpose of these standards and why are they important?
- What is a conceptual framework, and how does one create one? In financial accounting, why is a conceptual framework required?In general, what is the conceptual framework that underlies accounting principles, and how does it encourage high-quality financial reporting?Why do you think Accounting Standards are mandatory?