BUS FPX 2061 Assessment 1 Template

BUS FPX 2061 Assessment 1 Template

Student Name

Capella University

BUS-FPX2061 Accounting Fundamentals

Prof. Name

Date

Part 1 – Accounting Environment

1. Describe the similarities and differences between financial and managerial accounting.

Both financial and managerial accounting are essential branches of the accounting field, sharing the common purpose of recording and analyzing financial transactions. However, they differ in their focus and audience. Financial accounting is primarily designed for external stakeholders such as investors, creditors, and regulatory bodies. It involves the preparation of standardized financial reports, including the balance sheet and income statement, which provide an overview of the company’s financial position and performance.
In contrast, managerial accounting is focused on internal decision-making processes. It provides detailed reports and analysis to assist management in planning, controlling, and evaluating business operations. While financial accounting adheres strictly to established standards such as Generally Accepted Accounting Principles (GAAP), managerial accounting offers flexibility in reporting formats tailored to management needs.

2. Describe the four major types of internal users of accounting data.

The four primary internal users of accounting information are managers, employees, owners, and department heads. Each group utilizes accounting data differently to support operational and strategic decisions.

Internal User	Purpose of Using Accounting Data
Managers	Use accounting data to plan, control, and evaluate business activities.
Employees	Review data for performance evaluation and compensation purposes.
Owners	Analyze reports to assess profitability and make investment decisions.
Department Heads	Use financial information for budgeting, resource allocation, and operational efficiency.

These users rely on accurate accounting information to ensure informed and effective management of organizational resources.

3. Identify each of the six organizations that influence accounting practice.

Several professional and regulatory organizations shape accounting principles and practices in the United States. The six key organizations include:

Organization	Description / Role
American Institute of Certified Public Accountants (AICPA)	Establishes ethical standards and auditing guidelines for CPAs.
Financial Accounting Standards Board (FASB)	Develops and issues accounting standards known as GAAP.
Securities and Exchange Commission (SEC)	Regulates financial reporting for publicly traded companies.
Internal Revenue Service (IRS)	Oversees tax reporting and compliance.
Institute of Management Accountants (IMA)	Promotes best practices in management accounting and provides certification (CMA).
Governmental Accounting Standards Board (GASB)	Establishes accounting standards for state and local governments.

These organizations collectively ensure transparency, consistency, and reliability in accounting practices.

4. Identify and describe the three basic forms of business organization.

Businesses commonly operate under three main organizational structures: sole proprietorship, partnership, and corporation.
A sole proprietorship is owned and managed by a single individual, offering simplicity in setup but exposing the owner to unlimited liability. A partnership involves two or more individuals who share profits, responsibilities, and liabilities. In contrast, a corporation is a separate legal entity owned by shareholders, providing limited liability protection and easier access to capital but requiring adherence to more regulations and tax obligations.

5. Identify the primary objectives of every business.

Every business organization aims to achieve three fundamental objectives: profitability, growth, and sustainability. Profitability ensures that the company generates sufficient income to cover expenses and reward stakeholders. Growth focuses on expanding operations, market share, and capabilities. Sustainability involves maintaining long-term stability by balancing economic performance with ethical and environmental responsibility.

6. Describe the difference between an asset and a liability.

An asset is any resource owned by a business that holds economic value and can contribute to future benefits, such as cash, equipment, or land. Conversely, a liability represents an obligation or debt the company owes to others, such as loans or accounts payable. Assets increase a company’s overall value, whereas liabilities reflect external claims against those assets. The difference between assets and liabilities forms the basis of the company’s equity position.

Part 2 – Income Statement

Account Title	Amount (USD)
Ticket Revenue	205,000
Equipment Rent Expense	75,000
Film Rent Expense	78,400
Concession Revenue	54,600
Advertising Expense	43,600
Salaries Expense	85,000
Utilities Expense	39,100
Cash Dividends Declared and Paid	37,000

Part 3 – Statement of Retained Earnings

Description	Amount (USD)
Retained Earnings – June 1	109,900
Add: Net Income	(61,500)
Total	48,400
Less: Dividends	37,000
Retained Earnings – End	11,400

Part 4 – Balance Sheet

Category	Account	Amount (USD)
Assets	Cash	165,000
	Land	173,000
	Total Assets	338,000
Liabilities and Equity	Accounts Payable	112,600
	Stockholders’ Equity	225,400
	Total Liabilities & Equity	338,000

References

Financial Accounting Standards Board (FASB). (2024). Generally Accepted Accounting Principles (GAAP). https://www.fasb.org/

American Institute of Certified Public Accountants (AICPA). (2024). Professional Standards. https://www.aicpa.org/

Institute of Management Accountants (IMA). (2024). Management Accounting Practices. https://www.imanet.org/

BUS FPX 2061 Assessment 1 Template

Securities and Exchange Commission (SEC). (2024). Regulatory Reporting Requirements. https://www.sec.gov/