ipl-logo

Analy Explained Accounting Principles (G. A. A. P)

1766 Words8 Pages

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (G.A.A.P)
GAAP is an international convention of good accounting practices. It is based on the following core principles. In certain instances particular types of accountants that deviate from these principles can be held liable.
The Business Entity Concept:-
The business entity concept provides that the accounting for a business or organization be kept separate from the personal affairs of its owner, or from any other business or organization. This means that the owner of a business should not place any personal assets on the business balance sheet. The balance sheet of the business must reflect the financial position of the business alone. Also, when transactions of the business are recorded, any personal …show more content…

The values of the assets belonging to a business that is alive and well are straightforward. For example, a supply of envelopes with the company's name printed on them would be valued at their cost. This would not be the case if the company were going out of business. In that case, the envelopes would be difficult to sell because the company's name is on them. When a company is going out of business, the values of the assets usually suffer because they have to be sold under unfavorable circumstances. The values of such assets often cannot be determined until they are actually …show more content…

These fiscal periods are of equal length, and are used when measuring the financial progress of a business.
Example
The income statement is the financial statement that best shows the periodicity assumption. The income statement presents the business performance for a given time period. A year-end income statement shows the income and expense performance for the company for the entire year. Monthly and quarterly income statements are often issued as well. The balance sheet, on the other hand, only shows a picture of the company on a single date in time. The balance sheet does not reflect a period of time but rather a moment in time.
The Revenue Recognition Convention:-
The revenue recognition convention provides that revenue be taken into the accounts (recognized) at the time the transaction is completed. Usually, this just means recording revenue when the bill for it is sent to the customer. If it is a cash transaction, the revenue is recorded when the sale is completed and the cash

Show More
Related

Acc 201 Final Project Part 1 Accounting Cycle

1187 Words | 5 Pages

Financial statement begins when receiving the balance from the adjusted trial . The very last of an accounting time frame is the financial statement. There is a lot of different financial statements that would come from this step such as statements of retained earning, balance sheets, cash flow statement, and income statement. This would be the output of the accounting process (edunote (2016).

Read More

Wgu Audit Task

529 Words | 3 Pages

Clients must keep records and books of accounts including cash book, sales ledger, purchases ledger and general ledger. Supporting documents such as invoices, bank statements, pay-in slips, cheque butts, and receipts for payments, payroll records and copies of receipts issued should be retained. A valuation of the stock in trade should be made at the end of the accounting period and the appropriate records maintained. Company should record sufficient to explain each transaction and to enable a true and fair profit & loss account and balance sheet to be prepared. At the end of the accounting period, a physical stock-take should be made to ascertain the quantity and the cost of the stock in hand or the cost of work in progress statements and

Read More

Eagle Outfitters Financial Ratios Paper

705 Words | 3 Pages

In the B-Form 10-K American Eagle Outfitters’ provided, it displayed two years of complete balance sheets. A balance sheet will display the basic accounting equation, which are assets equals’ liabilities plus stockholders’ equity. Economic resources that a company or corporation owns are known as assets. Liabilities are essentially moneys that a company or corporation owe. Stockholders’ equity can be classified as the amount of funds provided by business owners and the earnings that become reinvested into the company (Bethel,

Read More

Ggb 515 Task 1

789 Words | 4 Pages

As such, governments adhere to a different set of financial reporting and accounting standards. Governmental accounting and financial reporting standards help stakeholders assess how public resources were acquired and how resources are or will be spent. Accounting is a systematic reporting and recording of assets, liabilities, capital, income and expenditure. Because the public sector operates under a different environment then the private sector, government accounting is specific to the functions of the public sector. State and local governments follow the principles and guidelines developed by the Government Accounting Standards Board (GASB).

Read More

Hcs/531 Week 4 Health Care Paper

1417 Words | 6 Pages

(Arnow & Xakellis, 2001). Assets An asset is any item or property that can be considered to have value, owned by a person or business, in this case we will deal with that of the health care business area. “Cash, accounts receivable, notes receivable, and inventory are

Read More

Macy's Accounting Principles

185 Words | 1 Pages

The financial data and the information provided in the analysis of the financial situation are following the accounting principles (GAAP). Some other data and results which are not accepted GAAP but related

Read More

Dollarama Company Case

990 Words | 4 Pages

Non-current assets are items owned by an entity that cannot be converted into cash within one year. Goodwill is the value of the company’s reputation, location, and brand. Goodwill is an intangible asset. It appears on the balance sheet when a company buys another and pays more for the company’s intangible assets than tangible assets. There are three sources of goodwill of Dollarama Inc.

Read More

The Real Estate Investment Trust Act Of 1960

1285 Words | 6 Pages

In these sorts of cases the property isn't being sold yet rented. If these properties were named stock, at that point all upkeep and repairs would expense as brought about, and no deterioration would be perceived (Wen Peng & Newell, 2012, p. 77). Be that as it may, as property, plant, and gear, support and repairs would be promoted, and devaluation would be perceived over the life of the advantage. This dramatically affects the asset report, and the main issue. Another issue is the reasonable portrayal of the budgetary circumstance of the organization (Coumarianos, 2017).

Read More

Artists In The Music Industry: A Case Study

1101 Words | 5 Pages

This study addresses how self-made artists in the music industry uses marketing skills to help promote their music compared to the artists that are signed to a record label. Throughout this essay, I’m to going to analyze and compare Chance the Rapper’s sales to that of a well-known Hip/Hop artist J. Cole and the marketing schemes deployed by the upcoming artists in the music industry. Artists must learn to adapt to change constantly. They have to incorporate or amalgamate several marketing and promoting schemes to grow their audience organically.

Read More

Tesco Accounting Report

1656 Words | 7 Pages

The paper will calculate the financial ratios of company that will be interpreted with the implications of ratios. Moreover, the paper will describe the indicators of fraudulent reporting. Discussion Purpose of Income Statement It is also called profit and loss statement or income or expense statement. The main purpose of income statement is to indicate managers and investors whether the organisation was cost-effective

Read More

The Role Of Judging Others In To Kill A Mockingbird, By Harper Lee

936 Words | 4 Pages

First, you shouldn't prejudge the worth or value of something, by its

Read More

Inventory Valuation Analysis

1594 Words | 7 Pages

Having different accounting standards in the world is a problem for multinational public limited companies and investors in order to be able to compare and evaluate financial statements (Doupnik & Perera, 2009). Due to the economic and financial scandals and meltdown in recent years, the pressure has been increased on some countries such as United States. Therefore, it must eliminate the gap between the International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP). The world of accounting diversity will have consequences on such changes, and the standard convergence of US GAAP with International Financial Reporting Standards also largely affect corporate management, investment, stock market, accounting personnel and accounting standard setters. In addition, the convergence of accounting standards will change the approach for international accounting harmonization to CPA and CFO, it affects the quality of international accounting quality standards and the effort made toward GAAP and IFRS convergence

Read More

The Importance Of Accounting In Personal Finance

748 Words | 3 Pages

However, in personal finance, cash accounting is often used to define and account for events when the cash changes hands. This practically implies that in personal finance, incomes and expenses are noted when the cash is received or paid, or when the cash actually flows. In managing personal finance, the accounting process in crucial in that it records personal transactions of what flows in and what flows out. As checkbooks records most transactions with statement from bank carrying others, this accounting transaction information is summarized in financial statement and can easily be read most efficiently. Furthermore, the summary report of the income statement, cash flow statement, and balance sheet clearly show one’s personal financial status paving the way for better managing personal finance.

Read More

Self Reflection In Financial Management

1051 Words | 5 Pages

 Income data (experiences, estimates of sales, fund rising, membership etc and planned activities).  Data come from previous budgets, estimates, experience of others and public available statistics. I was also able to identify the main uses of accounting and these are as follow:  Information All organizations need to keep records of their financial transactions so that they can access Information about their financial position, including: summary of income and expenditure, the outcome of all operations, assets and liabilities.

Read More

Accounting Information System Literature Review

1372 Words | 6 Pages

It is a computerized accounting of produce the financial statement named as Income Statement. Cash Flow Statement and Balance sheet. Accounting Information System can ensure the reliability of financial information processing and control and measures the economic information reliability. Managers Need AIS means to decide internal controls. (Teru, 20 Sept

Read More

More about Analy Explained Accounting Principles (G. A. A. P)

Related Topics

Open Document