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Accounting Questions and Answers (Q&A)

S. Barnes

Driving down to Knowledge town

CAT and AAT are two different qualifications. However, many people don’t know their differences. CAT is the acronym for Chartered Certified Accountant, and AAT is the acronym for Association of Accounting Technicians. Although both qualifications are basked in the United Kingdom, they are recognized in many commonwealth nations and the United States. Different accounting bodies run AAT and CAT. CAT is sponsored and offered by ACCA and AAT is run by other professional accounting bodies.

ACCA use to be the sponsor of AAT until it became a separate accounting qualification offered by a different body. AAT offers an entry-level point for an individual interested in studying accounting while CAT is for accountants looking to further their careers. So if you are hoping to begin from the start point, AAT is the most preferred option for you. I hope you find this information helpful.

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When you don't have more understanding about some business terms, you are very liable to misinterpret those terms. What most people know about profit is actually the gain an investor generated after a successful transaction. Some don't know there are other types of profit like accounting and economic profit. However, both terms are not the same. Accounting profit is a type of profit you have after deducting the total cost from the total revenue, without adding the values of those things you lose in a bid to acquire something else.

Economic profit, on the other hand, is a type of profit you have after deducting the total cost from the total revenue, including the cost of those things you lose in a bid to acquire some goods and services. Going by the definition above, it is obvious that economic profit will always have lesser value compared to accounting profit because opportunity cost will not be recorded in accounting profit but it will have effect in economic profit.

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The or8gin of the information that is recorded into the accounting
books

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Why? Could you please explain your reasoning and expand on your thought process so we can understand why this is the correct answer?

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Accounting is a broad field where there are many different avenues to take. If you are a college student interested in numbers, you may want to go into accounting. However, you will need to determine which type of accounting you would like to do. There are two types, including managerial accounting and financial accounting. Managerial accounting has to do with managing accounts for a company so that they help the company decide how they are going to plan and control their company.

Financial accounting has to do with the stockholders and other people who do not belong to the company. The big difference between managerial accounting and financial accounting has to do with who they represent and are working for.

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Assets= liabilities + owners equity

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The entries to revenues accounts such as Service Revenues are usually called debit.

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When it is probable that economic benefits will flow to the entity from the asset and it can be reliably measured

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The cost of land should include the cost of removing unwanted buildings and the cost of grading and clearing the land. In other words, the correct answer is D: both A and B. When you’re buying land for a business, you have to take into account many things.

Once you actually settle on a piece of land, you need to make sure that you can pay to have it cleared of unwanted buildings and to make it usable. You can’t just build on any piece of land, unfortunately.

This means that you have to make sure you have the money not only to buy the land, but to make all the necessary changes to the land. The best way to do that is to do your research ahead of time.

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