Financial Accounting Principles, Career Paths, and Ethics

This document provides a detailed solution to an accounting assignment, covering key concepts such as the definition of accounting, bookkeeping, and double-entry bookkeeping. It explores essential monetary information and distinguishes between recording, classifying, and summarizing functio...Read More

ANSWER
Ans 1
Proficient Level - Accounting is the process whereby each transaction that takes place during the
course of the business are recorded, classified, summarized in a defined manner and interprets
the results thereof.
Book keeping is the process whereby the recording of transaction takes place in significant and
defined manner. Double entry book keeping is the process which affects two sides
simultaneously (Sangster, 2015).
Information that is critical to the accounting function is – Monetary Information of revenue and
capital expenditure and income. (Shim and Siegel, 2015).
Distinguished Level - Three groups of function are recording, classifying and summarizing.
Recording pertains to enter the detail of transactions, classifying pertains to classification of each
transaction according to the nature and summarizing pertains to giving brief of the data.
Ans 2
Proficient Level and Distinguished Level – Following are the major five opportunities available
for careers in the accounting profession:
- Self Employed – The student is required to obtain the degree of Certified Public
Accountant after passing of the exams held by the American Institute of Certified Public
Accountants.
- Employment in Private Sector – In this, any student has studied accounting can go for job
in the private sector companies.
- Auditing – Auditing is the process where accountants conducts the analysis of the
financial statements. The student can join CPA Firms.
- Tax Return – Accounting also involves the imparting of the knowledge of tax related
issues and accordingly can prepare and file the tax return.

- Government sector – Accounting student can apply for the government sector
employment and also in nongovernmental organization.
Ans 3
Proficient Level – The categories of accounting are Financial Accounting and Management
Accounting. The major difference between the two categories is that the former is meant for the
purpose of the external users and the latter is meant for the purpose of the internal users. The
major similarity is that both the accounting is done by the same accountant (Edwards,
Hermanson, & Maher, 2011).
Distinguished Level – Following are the major four types of internal management decisions:
1. Finance – Decision as to whether purchase the particular assets or not.
2. Investing – Decision as to whether invest in the particular assets or not.
3. Production – Decision as to which products shall be purchased and when.
4. Sales and Marketing – Decision as to type of markets where the company shall target for
business.
Ans 4
Proficient Level and Distinguished Level – Following are the six organizations:
1. Financial Accounting Standards Board – It is the private sector board. It is comprised of
three major members – Financial Accounting Foundation, Financial Accounting Standard
Advisory council and the major Financial Accounting Standard Board.
2. Governmental Accounting Standards Board – It is a private sector organization and has
been implementing the governmental new principles, concepts and standards.
3. Securities and Exchange Commission – It is the government agency which regulates the
sale and purchase of securities.
4. American Institute of Certified Public Accountants – It is the professional association
which plays major role in the development and application of accounting standards.

5. Accounting principles Board – It is association which has been providing the valuable
inputs and its services to the Financial Accounting Standards Board.
6. American Accounting Association – It is the association which imparts the education and
development in the field of accounting (Barth, Beaver & Landsman, 2011).
Ans 5
Proficient Level and Distinguished Level
In the field of accounting, ethics in business, ethical practices and ethical climate plays a very
important role. Accounting envisage the arithmetically accuracy and the ethics envisage the true
and correct presentation of the financial statements of the company (Onyebuchi, 2011).
In order to protect from the potential scandals and law suits, the company shall implement the
code of conduct through which the ethics in every function of the business shall prevail. By
having the defined code of conduct, the behavior of each individuals involved in the organization
are evaluated against the predefined standards and thus in this way helps in making ethical
decision.
REFERENCES
Barth, M. E., Beaver, W. H., & Landsman, W. R. (2011). The relevance of the value relevance
literature for financial accounting standard setting: another view. Journal of accounting and
economics, 31(1), 77-104.
Edwards, J. D., Hermanson, R.H., & Maher, M. W. (2011), Accounting principles: A business
perspective, financial accounting (Chapters 1–8).Textbook Equity.
Onyebuchi, V. N. (2011). Ethics in accounting. International Journal of Business and Social
Science, 2(10), 82-99
Sangster, A. (2015). The genesis of double entry bookkeeping. The Accounting Review, 91(1),
299-315.
Shim, J. K., & Siegel, J. G. (2015).Dictionary of accounting terms (6th ed.). Hauppauge, NY:
Barron's Educational, 5, 2-24