Name _Lauren Sutherland_____Chapter 171. What is the key difference between managerial and financial accounting?Managerial accounting is accounting used to provide information and analyses to managers inside the organization to assist them in decision making. While financial accounting is accounting information and analyses prepared for people outside the organization.2. What is the job of an auditor? What’s t an independent audit?The job on an auditor is that an auditor guarantee that the company or business is carrying out proper accounting procedure and financial reporting.3. What’s the purpose of accounting journals and of a ledger?The purpose of accounting journals and of a ledger is the record book or computer program where the accounting data are first entered. It is a specialized accounting book or computer program which the information from accounting journals is accumulated into specific categories and posted so the managers can find all the information about one account in the same place.4. How has computer software helped businesses in maintaining and compiling accounting information?Computer software has helped businesses in maintaining and compiling accounting information by allowing their information/numbers to be more accurate. 5. What do we call the formula for the balance sheet? What three accounts does it include?We call the formula for the balance sheet the fundamental accounting equation and it includes the assets, liabilities, and owner’s equity.6. What does it mean to list assets according to liquidity?What it means to list assets according to liquidity is it means the ease with which we can covert the assets into cash.7. What’s the difference between long-term and short-term liabilities on the balance sheet?The difference between long term and short term liabilities on the balance sheet is short term is one company expects to pay in short term using assets noted on a presentbalance sheet. While long term is formalized through paperwork that lists its term such as the principal amount involved, its interest payment, and when it due. 8. What is owners’ equity and how do we determine it?The owner’s equity and how it is determined is the amount of business that belongs tothe owners, minus any liabilities the business owes. The owner’s equity is assets minus liabilities.9. Why is the statement of cash flows important in evaluating a firm’s operations?The cash flows, important in evaluating a firm’s operations is reports cash receipts and cash disbursement related to the the major activities of a firm such as the operations, investment, and financing. It helps in deciding the success or failure of any business.10. What is the primary purpose of performing ratio analysis using the firm’s financial statements?The primary purpose of performing ratio analysis using the firm’s financial statement is to buy and sell securities for companies and individual
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