Financial Accounting Midterm Project Essay Example | Topics and Well Written Essays - 2000 words

Financial Accounting Midterm Project - Essay Example Meanwhile, managerial accounting reports are designed to serve specific needs of the management. They make use of both historical data and estimated data. While financial accounting reports have to be prepared according to the Generally Accepted Accounting Principles (GAAP), the same does not hold true with managerial accounting reports. (Warren, Reeve, etc., 1987, pp. 2-4) A job opening in the field of financial accounting at the Monster website states that "the Accounting Manager is responsible and accountable for the entire Company's Accounting Department." As such, he/she will manage and provide direction to the accounting department personnel as well as direct and lead all accounting functions to ensure that all accounting, financial and tax information are properly disseminated and reported. The job requirements include a bachelor's degree in Accounting, experience in cost accounting and the preparation of cash flow statements and skills in preparing tax returns and audit revie ws. (Monster 2010) Meanwhile, a job opening in the field of managerial accounting requires a Revenue Accounting Manager who will have the following main duty: "continuously work to understand the various revenue streams to ensure the highest levels of revenue recognition." (Monster 2010) Similarly, the job requirements include a bachelor's degree in Accounting. In contrast to the job opening for a financial accountant, however, this one requires "strong project management and planning skills" and an "analytical mind which is able to process information logically delivering value added analysis." These stuffs are definitely necessary in the domain of managerial accounting. 2. According to history, accounting was first established by Luca Pacioli - an Italian Renaissance mathematician, a close friend and tutor to Leonardo da Vince and a contemporary of Christopher Columbus. Pacioli described in his work entitled "Summa de Arithmetica, Geometria, Proportione et Proportionalite" a syste m that served to make sure that financial information were efficiently kept in accurate records. This basic system eventually became established as the way to note down all transactions of businesses. (Weygandt, Kieso, etc. 2009, pp. 5-6) 3. The following are the liquidity ratios of Microsoft Corporation (MSFT) and Apple Inc. (AAPL) for the year 2010: MSFT AAPL Current Ratio 2.5 1.8 Acid Test Ratio 2.2 1.6 These ratios show that both MSFT and AAPL have sufficient liquid resources to pay up their short-term liabilities. Of the two, MSFT is the company with the higher level of liquidity. The current ratios indicate that their current assets can well be utilized to fully settle their current liabilities. Meanwhile, the acid test ratios indicate that the two companies would be able to fully settle all their short-term liabilities by using only the most liquid of their assets - namely: cash, marketable securities and accounts receivable. 4. The following are the activity measures of Micr osoft Corporation (MSFT) and Apple Inc. (AAPL) for the year 2010: Asset Management Ratios MSFT AAPL Inventory Turnover (# of times) 19.2 63.9 Accounts Receivable Turnover 5.5 16.7 Fixed Assets Turnover 8.8 17.0 Total Assets Turnover 0.8 1.1 The above