FUNDAMENTALS OF ACCOUNTING

PREPARATION ASSIGNMENT FOR CLASS #1

A) Read the Course Syllabus carefully. We will be reviewing the MOST IMPORTANT PARTS of this in class.
Come prepared to ask anything that I might not cover.
B) Come to class Monday prepared to discuss the following. As always, the best way to demonstrate
preparation for class is by handing in the assigned work. (Hint: I would like you to hand in written answers to
these). They should be done on word-processing hand written work will NOT be accepted.
1. You just got done spending 3 months of your life taking a course called Fundamentals of Financial
Accounting. In your own words, what was the course all about? What was the purpose? Whats
financial accounting?
2. What (are/is) Generally Accepted Accounting Principles (GAAP)? Why are they needed?
3. Are ethics important in financial accounting? Yes or no and WHY. Give a SPECIFIC EXAMPLE of how
this area is important to YOU as a member of society?
4. Whats managerial accounting?
5. Do you think that something similar to GAAP is needed for Managerial Accounting? Why or why not?
6. Whats inventory? How was that accounted for in Financial Accounting? WHY was that the correct
treatment? For a merchandiser, what types of things were included in inventory?
7. What are sales? What are revenues? Are they different? If so, how?
8. What is meant by cost of goods sold?
9. NOW ASSUME we were a manufacturer instead of a retailer how would your answers #6-#8 be
different? WHY?
10. What is managerial accounting and how does it differ from financial accounting?
11. In your opinion, what are the two most significant differences between the two disciplines? WHY are
these so important?
12. What are the three major areas of management responsibility (information needs) that managerial
accounting addresses? Say we have a company that manufactures and sells chairs. Give an example
of each of these areas?
13. Explain the term product costing? What do you think it means to cost a product? WHY do you
think managers need this? WHY do accountants need this?
14. Are ethics important in managerial accounting? Yes or no and WHY? Give a specific example of
how ethics might apply.
15. What is meant by the value chain? Why is it important?