Short answer 1. Differentiate broadly between financial accounting and manageria

Question

Short answer

1. Differentiate broadly between financial accounting and managerial accounting.

2. Differentiate between “financial statements” and “financial reporting.”

3. How does accounting help the capital allocation process?

4. What is the objective of financial reporting?

5. Briefly explain the meaning of decision-usefulness in the context of financial reporting.

6. Of what value is a common set of standards in financial accounting and reporting?

7. What is the likely limitation of “general-purpose financial statements”?

Explanation / Answer

Answer(1): Difference between financial accounting and managerial accounting-

Answer(2): Differentiate between “financial statements” and “financial reporting.”-

Answer(4) Objective of financial reporting- The main objective of financial reporting is to show the correct and accurate financial information to the stakeholders so that creditors, shareholders, Government and public can get to know the financial information of the company.

Answer(7): General-purpose financial statements do not fulfill the needs of stakeholders like creditors, shareholders, owners and Government etc.

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