What is Financial Accounting? - Definition & Purpose


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question 1 of 3

Choose the BEST answer to distinguish between financial and managerial accounting.

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1. Which statement is TRUE regarding GAAP?

2. Which entity regulates the trading of stocks but does not guarantee the profitability of the investment?

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About This Quiz & Worksheet

This quiz and worksheet will ensure your understanding of financial accounting requirements, such as generally accepted accounting principles (GAAP) and financial reporting.

Quiz & Worksheet Goals

By completing this quiz, your knowledge of the following will be tested:

  • Distinguishing between financial and managerial accounting
  • Entities required to follow GAAP
  • Regulatory agency that oversees trading of stocks
  • Financial documents required by GAAP to be used by publicly traded companies
  • Reporting requirements dictated by the matching principle

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related financial lesson
  • Interpreting information - verify that you can read information regarding regulatory requirements and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about GAAP

Additional Learning

To gain a better understanding of this topic, review the related lesson titled What is Financial Accounting? - Definition & Purpose. This lesson covers the following:

  • Financial accounting to assess the health of a company
  • Double-entry bookkeeping
  • FASB and the SEC
  • Four main financial statements