3 . Whom . are professionals of accounting 4. Differentiate GAAP and IFRS 5. Types of Adjusting Entries

3. **Whom are professionals of accounting?**<br /><br />Professionals of accounting include a range of roles focused on recording, analyzing, and interpreting financial information. Key examples include:<br /><br />* **Certified Public Accountants (CPAs):** Licensed professionals who provide auditing, tax, and advisory services to individuals and businesses.<br />* **Chartered Accountants (CAs):** Similar to CPAs, but with a designation more common outside the United States.<br />* **Certified Management Accountants (CMAs):** Specialize in cost accounting, financial planning, and internal controls within organizations.<br />* **Enrolled Agents (EAs):** Federally-authorized tax practitioners who represent taxpayers before the IRS.<br />* **Bookkeepers:** Maintain daily financial records and transactions.<br />* **Auditors:** Examine financial statements to ensure accuracy and compliance.<br />* **Financial Analysts:** Analyze financial data to provide investment recommendations.<br />* **Tax Preparers:** Assist individuals and businesses with preparing and filing tax returns.<br />* **Forensic Accountants:** Investigate financial fraud and other illegal activities.<br />* **Controllers:** Oversee the accounting operations of a company.<br /><br /><br />4. **Differentiate GAAP and IFRS:**<br /><br />GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) are both sets of accounting standards used to prepare financial statements. Here's a breakdown of their key differences:<br /><br />| Feature | GAAP | IFRS |<br />|----------------|------------------------------------|---------------------------------------|<br />| Basis | Rules-based | Principles-based |<br />| Focus | Specific guidance and detailed rules | Broader principles and professional judgment |<br />| Inventory | LIFO (Last-In, First-Out) allowed | LIFO prohibited |<br />| Intangible Assets | Cost-based unless acquired | Revaluation allowed |<br />| Development Costs| Expensed | Capitalized if certain criteria are met |<br />| Statement of Cash Flows | Indirect method preferred | Direct method encouraged |<br /><br /><br />5. **Types of Adjusting Entries:**<br /><br />Adjusting entries are made at the end of an accounting period to ensure that revenues and expenses are recognized in the correct period. Common types include:<br /><br />* **Prepaid Expenses:** Allocating the portion of a prepaid expense (like insurance or rent) that has been used up during the period.<br />* **Unearned Revenues:** Recognizing revenue that has been earned but not yet recorded. This often applies to subscriptions or advance payments.<br />* **Accrued Expenses:** Recording expenses that have been incurred but not yet paid, such as salaries or utilities.<br />* **Accrued Revenues:** Recognizing revenue that has been earned but not yet billed, such as interest earned.<br />* **Depreciation:** Allocating the cost of a long-term asset (like equipment or buildings) over its useful life.<br />* **Bad Debt Expense:** Estimating the portion of accounts receivable that is unlikely to be collected.<br />