Acco 112 T1

ACCO 112 |
TALLER 1 |
|

“Accounting is ingrained in our society and it is vital to our economic system.” Do you agree? Explain.

Accounting is the financial information system that provides these insights. In short, to understand your organization, you have to know the numbers. Accounting consists of three basic activities it identifies, records, and communicates the economic events ofan organization to interested users.

1. Identify and describe the steps in the accounting process.

Accounting consists of three basic activities it identifies, records, and communicates the economic events of an organization to interested users.

2. (a) Who are internal users of accounting data?

Internal users of accounting information are managers who plan, organize, andrun the business. These include marketing managers, production supervisors, finance directors, and company officers.

(b) How does accounting provide relevant data to these users?

Help users make decisions about their companies. Examples are financial comparisons of operating alternatives, projections of income from new sales campaigns, and forecasts of cash needs for the next year.3. What uses of financial accounting information are made by (a) investors and (b) creditors?

A) Investors: use accounting information to make decisions to buy, hold, or sell ownership shares of a company.
B) Creditors: use accounting information to evaluate the risks of granting credit or lending money.

4. “Bookkeeping and accounting are the same.” Do you agree? Explain.

Thereare not the same, Bookkeeping usually involves only the recording of economic events. It is therefore just one part of the accounting process.

5. Eve Myles Travel Agency purchased land for $90,000 cash on December 10, 2012. At December 31, 2012, the land’s value has increased to $93,000. What amount should be reported for land on Eve Myles’s balance sheet at December 31, 2012? Explain.Eve Myles Travel should be report the same price, The cost principle (or historical cost principle) dictates that companies record assets at their cost. This is true not only at the time the asset is purchased, but also over the time the asset is held under cost principle.

6. What is the monetary unit assumption?

The monetary unit assumption requires that companies include in theaccounting records only transaction data that can be expressed in money terms. This assumption enables accounting to quantify (measure) economic events. The monetary unit assumption is vital to applying the cost principle.

7. What is the economic entity assumption?

The economic entity assumption requires that the activities of the entity be kept separate and distinct from the activities of itsowner and all other economic entities.

8. What are the three basic forms of business organizations for profi t-oriented enterprises?
Three basics forms of bussiness organizations are:
* Propriership: a bussiness owned by one person.
* Partnership: a bussiness by two or more persons associated as partners.
* Corporation: a bussiness organized as a separate legal entity understate corporation law an having ownership divided into transferable shares of stock.

9. Maria Contreras is the owner of a successful printing shop. Recently, her business has been increasing, and Maria has been thinking about changing the organization of her business from a proprietorship to a corporation. Discuss some of the advantages Maria would enjoy if she were to incorporate herbusiness.

When you incorporate you are only responsible for your investment in the corporation. The limited liability feature of a corporation, while not a guarantee, is DEFINITELY one of the most attractive reasons for incorporating. Corporations are generally much easier to sell and are usually more attractive to buyers than either a sole proprietorship or partnership.

10. What is the...