FABM LESSON 2

• What is the focus of Financial Accounting?

  Periodic reporting of financial statements
• Why are financial statements standardized in Financial Accounting?

  To ensure understandability for users
• What are general-purpose financial statements?

  Statements catering to common external user needs
• What does Management Accounting focus on?

  Internal reporting and analysis of financial information
• What types of information does Management Accounting involve?

  Cost accounting, budgeting, and forecasting
• What is the focus of Government Accounting?

  Custody and administration of public funds
• What is the purpose of Auditing?

  To evaluate evidence and express an opinion
• What does Tax Accounting refer to?

  Preparation of tax returns and tax services
• What is the focus of Cost Accounting?

  Systematic recording and analysis of costs
• What does Accounting Education involve?

  Teaching accounting and related subjects
• What is the purpose of Accounting Research?

  Study and analysis of economic events
• What are the branches of accounting and their services?

  • Financial Accounting: General-purpose financial statements
  • Management Accounting: Internal reports for management
  • Government Accounting: Custody of public funds
  • Auditing: Independent auditor's report
  • Tax Accounting: Tax returns and advice
  • Cost Accounting: Analysis of product/service costs
  • Accounting Education: Teaching accounting subjects
  • Accounting Research: Economic event analysis
• Who uses Financial Accounting services?

  All businesses and external users
• What is the purpose of Management Accounting reports?

  To assist management in decision-making
• Who uses Government Accounting services?

  Government agencies
• What is required for businesses with gross quarterly revenues of ₱150,000?

  They must have financial statements audited
• Who requires Tax Accounting services?

  All businesses and taxpayers
• Why do businesses require Cost Accounting?

  To analyze costs and profitability
• Who benefits from Accounting Education?

  Accounting practitioners, students, and business owners
• Who uses Accounting Research services?

  Professional organizations and business owners
• Who are external users of accounting information?

  Users without authority to demand reports
• What do investors and stockholders assess?

  Whether to buy, hold, or sell investments
• Why do creditors/lenders need accounting information?

  To assess repayment ability of loans
• What do suppliers assess with accounting information?

  Business's ability to pay for goods/services
• Why do government agencies need financial information?

  For taxation and licensing purposes
• How does financial information benefit the general public?

  It provides updates on business prosperity
• Why do customers need accounting information?

  To assess business continuity for long-term involvement