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

Internal audit, Accounting is a significant service activity in business an...

Accounting is a significant service activity in business and is concerned along with collecting, evaluating, communicating and recording the results of past events. The history of

What are your co-workers like, They are likely to tests for tact, diplomacy...

They are likely to tests for tact, diplomacy, and with descriptive skills.

What is marginal cost and marginal revenue, Q. What is Marginal cost and ma...

Q. What is Marginal cost and marginal revenue? Marginal cost is the extra cost incurred by addingone more item. Marginal revenue is revenue from selling one more item. Economic

Abc''s product information current product, ABC's Product information Cu...

ABC's Product information Current Product Expansion Product (estimate) Selling Price $14.50 $ Units produced and expected to be sold 80,000 5,000 Machine Hours 40,000 5,00

Prepare data flow diagrams, Examine the present system and recoginize speci...

Examine the present system and recoginize specific weaknesses that must be addressed by a new improved system. As part of your analysis, prepare data flow diagrams (context, log

Income statement, Hermann Industries is forecasting the following income st...

Hermann Industries is forecasting the following income statement: Sales $10,000,000 Operating costs (excluding depreciation and amortization) 5,500,000 EBITDA $4,500,000 Depreciati

What does the 2011, At December 31, 2011 and 2010, Miley Corp. had 180,000 ...

At December 31, 2011 and 2010, Miley Corp. had 180,000 shares of common stock and 10,000 shares of 5%, $100 par value cumulative preferred stock outstanding. No dividends were decl

Nos, the spelling of number is different than code

the spelling of number is different than code

Purpose of adjusting entries, Q. Purpose of adjusting entries? In this ...

Q. Purpose of adjusting entries? In this section we exemplify each of the four types of adjusting entries asset/expense liability/revenue, asset/revenue and liability/expense.

Lack of accounting harmonisation between us gaap, In November 2012, US base...

In November 2012, US based information technology Hewlett Packard recorded a write-down of around $8.8 billion related to its $11.3 billion acquisition of the UK based software mak

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