INTRODUCTİON TO BUSİNESS

In the accounting system process examples for inputs Accounting Documents are sales documents, purchasing documents, payroll records, and bank records. Income statement is an example for the outputs. The correct answer is Choice E.

Accounting is famously known as the “the language of business”. is is because accounting is the means by which business information is communicated to all information users. e better our understanding of the language, the better we can understand what is happening with our finances, our businesses, or our investments. The correct answer is Choice A.

Many people confuse bookkeeping and accounting. They think that bookkeeping is accounting. Actually it is not. Bookkeeping is the act of recording and organising financial transactions in the accounting system in accordance with the generally accepted accounting principles (GAAP). Bookkeeping usually involves only the recording of budgetary events. The correct answer is Choice B.

Internal users of accounting information are managers who plan, organise, and run a business. They include marketing managers, production supervisors, finance directors, and company officers. External users are individuals and organisations outside a company who needs financial information about the company. There are several types of external users of accounting information. e two most common types are investors and creditors. The correct answer is Choice D.

External users are individuals and organisations outside a company who needs financial information about the company. ere are several types of external users of accounting information. e two most common types are investors and creditors. e information needs and questions of external users are quite different. Current and prospective investors (owners) use accounting information to make decisions to buy, hold, or sell stock. Creditors such as suppliers and banks use accounting information to evaluate the risks of selling on credit or lending money.11 Taxing authorities want to know whether the company complies with the tax laws. Customers or clients are interested in whether a company will continue to honor product warranties. Labor unions want to know whether the owners have the ability to pay increased wages and benefits. Regulatory agencies, such as the Securities and Exchange Commission or the Federal Trade Commission, want to know whether the company is operating within prescribed rules. The correct answer is Choice E.

Financial accounting and managerial accounting have different goals. Financial accounting focuses on reporting to external parties such as stockholders, investors, governmental agencies, creditors, banks, and suppliers. Financial accounting measures and records business transactions and provides financial statements that are based on generally accepted accounting principles (GAAP). Managerial accounting is concerned with providing information to internal decision makers, such as company managers. Managerial accounting uses both financial accounting and estimated data to aid management in running day-to-day operations and in planning future operations. The correct answer is Choice E.

In financial accounting the focus and emphasis are on the past; thus, it is past-oriented. It emphasizes financial consequences of past activities. However, managerial accounting is future-oriented. It emphasizes decisions affecting the future. Financial accounting emphasizes precision and managerial accounting the timelines. Financial accounting must follow GAAP and be certified by external, independent auditors. Managerial accounting, on the other hand, does not need to follow GAAP but are based on cost-benefit analysis. Financial accounting emphasizes summary data concerning the entire organization. Managerial accounting emphasizes detailed segment reports about departments, products, and customers. Fianacial accounting emphasizes objectivity and verifiability. Managerial accounting emphasizes relevance. The correct answer is Choice D.

The Union of Chambers of Certified Public Accountants of Turkey (TÜRMOB) is the national umbrella organization for the 81 local chambers of CPAs (SMMMs) and Chambers of Sworn-in CPAs (YMMs). e Union is empowered to award professional licenses that Turkey’s accountants must have to render professional services. The Law defines accounting and auditing as a profession and recognizes two qualifications of accounting and auditing professionals granted by the Union of Chambers of Certified Public Accountants (TÜRMOB): Certified Public Accountant (CPA, Serbest Muhasebeci Mali Müşavirler-SMMM) and Sworn- in Certified Public Accountant (Sworn-in CPAs, Yeminli Mali Müşavirler-YMM). The Banking Regulation and Supervision Agency sets financial reporting requirements for entities under its purview, while the Under Secretariat of Treasury supervises insurance, reinsurance companies as well as pension funds. The correct answer is Choice E.

Companies want to be profitable and financially strong to attract investors, so there is a conflict of interest here. To provide reliable information, financial statements of companies must be audited by independent accountants. An audit is an examination of a company’s financial records. The correct answer is Choice B.

The accounting process starts with identifying and analyzing business transactions
andevents. Transactions can include the sale of a product or the purchase of supplies, equipment, land, etc for business activities that impact the financial position of company. e transaction is recorded chronologically in the journal. All
the transactions are recorded through journal entries. e third step is to post each journal entry to the appropriate ledger accounts. The journalized transactions are posted to the account that it impacts. e accounting cycle requires summarizing of the entries pertaining to a particular period in a trial balance. A trial balance is essentially a list of all accounts and provides an overview of the various types of financial transactions entered into by any organization during a period. After preparation of trial balance, the next step is recording the adjustments like adjusting prepaid/outstanding expenses, recording advance/accrued income, etc. e purpose of adjusting entries is to match incomes with expense during the accounting period. One of the most important steps of the accounting process involve preparing the financial statements. Final step of the accounting process involves closing the books for the revenue and expense accounts which leads to begin again the entire cycle with zero balances. The correct answer is Choice A.