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Business and Finance 5200 Chapter 1

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Homework Assignment for Week 1:

Each week you will have a set of homework problems to complete. They are due by the following Sunday night at 11:55 pm, central time.

For Week 1, please turn in the answers to the following questions:

1. Describe the field of finance. How is it different from the field of accounting?

a. Finance is a powerful and influential field that can be defined as the art and science of managing money. Virtually all individuals and organizations earn or raise money and spend or invest money. Finance is concerned with the process, institutions, markets and instruments involved in the transfer of money among and between individuals, businesses and governments.

b. Accounting is the methodical or precise recording, reporting, and assessment of financial deals and transactions of a business. Accounting also involves the preparation of statements or declarations concerning assets, liabilities, and outcomes of operations of a business. In other words you could best describe accounting as the process for identifying, measuring and communicating the economics information about an entity for decisions and informed judgments to make financial decisions as well as performing traditional accounting duties.

2. In a typical corporation the finance function is divided into two divisions, or departments. What are they? What does each department do?

a. The Controller: Is responsible for the maintenance of adequate internal control and for the preparation of accounting records and financial statements such specialized activities as budgeting, tax planning and preparation of tax returns are usually placed under the controller's jurisdiction.

b. Treasurer: The Treasurers has custody of the company funds and is generally responsible for planning and controlling the company cash position. The treasurer's department also has

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