What are the basic principles of accounting and finance?
The basic principles of accounting and finance include the accrual principle, the consistency principle, the conservatism principle, the cost principle, the economic entity principle, the going concern principle, the matching principle, the materiality principle, and the monetary unit principle.
How does financial accounting differ from managerial accounting?
Financial accounting focuses on the preparation of financial statements for external stakeholders, while managerial accounting focuses on providing information for internal decision-making and control purposes within an organization.
What is the difference between cash basis accounting and accrual basis accounting?
Cash basis accounting recognizes revenue and expenses when cash is received or paid, while accrual basis accounting recognizes revenue and expenses when they are earned or incurred, regardless of the timing of cash flows.
What are the different types of financial statements?
The main types of financial statements are the income statement (or profit and loss statement), the balance sheet, the statement of cash flows, and the statement of retained earnings.
What is financial ratio analysis and how is it used in accounting and finance?
Financial ratio analysis involves calculating and interpreting various ratios using information from financial statements to assess the financial health and performance of a company. It is commonly used by investors, creditors, and management to make informed decisions.
What is the role of auditing in accounting and finance?
Auditing is the independent examination of financial statements and other financial information to provide an opinion on their fairness and compliance with applicable accounting standards. Auditing plays a crucial role in ensuring the reliability and credibility of financial information.