Generally accepted accounting principles, Accounting Basics

Assignment Help:

GAAP that is Generally Accepted Accounting Principles encompass the conventions, rules and processes necessary to explain accepted accounting practice at an exact time........generally accepted accounting principles comprise not only broad guidelines of general application, but also explained procedures and practices.

The word 'principles' is utilized to mean a "general law or rule adopted or professed like a guide to action, a settled ground or origin of conduct or practice". You will notice this definition illustrates a principle as a general law or rule which is to be utilized as a guide to action. It implies that accounting principles do not prescribe exactly how each detailed event occurring in business should be recorded. Thus, there are some matters in accounting practice that may be different from one company to the other.

Accounting principles are manmade. They are accepted as they are believed to be helpful. The general acceptance of an accounting principle or for such matter or like any principle generally depends upon how well it meets the three criteria of relevance, feasibility and objectivity. A principle is related to the extent that it results in meaningful or helpful information to those who require knowing about a specific business. A principle is objective to the extent such the information is not influenced through the personal bias or judgment of those who furnished it. Objectivity connotes dependability or trustworthiness that also means by the correctness of the information reported can be verified. The principle is reasonable to the extent such can be implemented without excessive complexity or cost.


Related Discussions:- Generally accepted accounting principles

Controller - chief accountant, Controller: Controller another name for Chi...

Controller: Controller another name for Chief Accountant is generally the head of the whole region of accounting, including internal audit. He is generally in charge of all types

Relevance information to financial reporting, Q. Relevance information to f...

Q. Relevance information to financial reporting? To have relevance information should be pertinent to or affect a decision. The information should make a difference to someone

Treatment in accounts, Assume in Balance sheet Furniture is given @ rs.1200...

Assume in Balance sheet Furniture is given @ rs.1200000. and an adjustment tells that half of the building is used for residential purpose... then what is treatment in accounts?

What is purchase discounts account, Q. What is Purchase Discounts account? ...

Q. What is Purchase Discounts account? The buyer records the purchase discount merely when the invoice is paid within the discount period and the discount is taken. The Purchas

Assignment, o depreciation on the building has been recorded in 2016. Depre...

o depreciation on the building has been recorded in 2016. Depreciation on the building is based on Double-Declining Balance. It was purchased on 1/1/15 and has an estimated useful

What is ledger, Ledger = From the Journal entries we will post the trans...

Ledger = From the Journal entries we will post the transactions in a book known as Ledger. Ledger is a book which contains the summarized and classified form of permanent record

Is the interest on a note receivables recorded, Is the interest on a note r...

Is the interest on a note receivables recorded if paid prior to the due date? A. Debit to interest expense B. debit to interest payable C. Credit to interest receivable D. Credit

Two-stage ddm model, Assorted fund, a U.K.-based globally diversified equit...

Assorted fund, a U.K.-based globally diversified equity mutual fund, is considering adding Talisman Energy Inc. (Toronto Stock Exchange: TLM) to its portfolio. Talisman is an indep

Homework help, #What kinds of risks does a firm like Amazon.com face with r...

#What kinds of risks does a firm like Amazon.com face with respect to safeguarding its assets? What types of controls do you think it already has in place to minimize these risks?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd