Question

In: Accounting

1. Define the following terms: (Chapter 14) a. Accounting b. Accrual basis of accounting c. Asset...

1. Define the following terms: (Chapter 14)

a. Accounting

b. Accrual basis of accounting

c. Asset management

d. Capital budget

e. Cash basis of accounting

f. Cash flow g. Financial accounting

h. Liquidity

i. Managerial accounting

j. Operating budget

Expert Solution

a. Accounting - Accounting generates information/data relating to operations/activities of the firm. The end product of accounting constitutes financial statements such as the balance sheet, the income statement and the statement of changes in financial positions and sources and uses/cash flow statement of funds.

b. Accrual basis of accounting - It is a method of accounting, recognises revenue at the point of sale and expenses when they are incurred.

c. Assets management - Assets management is the process of ensuring that a company's tangible and intangible assets are maintained, accounted for, and put to their highest and best use.

d. Capital budget - Capital budgeting is the process of evaluating and selecting long term investments that are consistent with the goal of shareholders (owners) wealth maximisation.

e.Cash basis of accounting - this basis of accounting generally maintain by charitable institution and govt. in this accounting, only cash receipt and disbursement has shown in financial statements.

f. Cash flow - Cash flow statement is a statement which indicates sources of cash inflows and transaction of cash outflow of a firm during an accounting period. The activities /transactions which generates cash inflows are known as sources of cash and activities which cause cash outflows are known as uses of cash.

h. Liquidity - Liquidity is the ability to transform a security into cash.

i. managerial Accounting - managerial accounting is the process of identifying, measuring, analyzing, interpreting and communicating information to managers for the pursuit of an organization goals.

j. Operating Budgets - Operating budget relates to physical activities/operations such as sales, production and so on.

Please go through these definations and let me know.

ekkarill92 answered 2 years ago

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