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

On january 1, On January 1, 2012, Lexmark Company's Accounts receivable acc...

On January 1, 2012, Lexmark Company's Accounts receivable account had a debit balance of $10,000. During January, 2012, the company billed customers for services in the amount of

Explain about the petty cash, Explain about the Petty Cash Petty Cash ...

Explain about the Petty Cash Petty Cash It is a small amount of money which is kept in the office for making small expenditures. ($10, $25, $50, etc.) Business will conclude

Finance officer, Finance Officer: the life blood of business is Finance. P...

Finance Officer: the life blood of business is Finance. Procuring financial resources and their judicious utilization are the two significant activities of financial management. F

T Accounts, Provided services on credit to Yamato P/L $5 900. How do we ap...

Provided services on credit to Yamato P/L $5 900. How do we apply this in the t accounts

Full disclosure, What is the full disclosure principle

What is the full disclosure principle

Describe about post-closing trial balance, Q. Describe about post-closing t...

Q. Describe about post-closing trial balance? A post-closing trial balance is trial balances taken subsequent to the closing entries have been posted. The only accounts that mu

The use of ledger accounts, The use of ledger accounts A journal entry ...

The use of ledger accounts A journal entry is similar to a set of instructions. The execution of these instructions is known as posting. Since stated earlier posting is recordi

Fundamental accounting1, I''m trying to figure out how do do a journal entr...

I''m trying to figure out how do do a journal entry. The question reads...a company purchased land worth $49,000 for an office by paying $6,300 in cash and signing a long term note

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