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

Accounting theory and practice 1st year mcom, Acid test ratio = 2.5, curre...

Acid test ratio = 2.5, current ratio = 1.5 net working capital = 10,00,000 fixed assets =? Share holder''s fund = 15,00,000 Stock inventory =? Bank overdraft =? Share capital =

Example of adjustments for deferred items, Q. Example of Adjustments for de...

Q. Example of Adjustments for deferred items? A real physical inventory a count of the supplies on hand at the end of the month showed only USD 900 of supplies on hand. Therefo

Net Cash, The net cash provided by operating activities is affected by

The net cash provided by operating activities is affected by

Accounting conventions, Accounting conventions The phrase 'convention' ...

Accounting conventions The phrase 'convention' is used to signify customs or ethnicity as a guide to the research of accounting statements. A variety of accounting conventions

Full disclosure, What is the full disclosure principle

What is the full disclosure principle

Describe about ledger, Q. Describe about ledger? A ledger (general ledg...

Q. Describe about ledger? A ledger (general ledger) is the absolute collection of all the accounts of a company. The ledgers are feasibly in a bound volume in, loose-leaf form

Frank Woods Business Accounting, J Green''s financial position at 1 May 200...

J Green''s financial position at 1 May 2008 was as follows bank 2,910 cash 160 equipment 5,900 premises 25,000 creditors R smith 890 t thomas 610 debtors j car

What is fob shipping point, Q. What is FOB shipping point? FOB shipping...

Q. What is FOB shipping point? FOB shipping point signifies free on board at shipping point. The buyer acquires all transportation costs after the merchandise has been loaded o

Cargin company uses the fifo method in its process costing, Cargin Company ...

Cargin Company uses the FIFO method in its process costing system. The Assembly Department started the month with 15,000 units in its beginning work in process inventory that wer

Aasignment coverage, Define accounting.Briefly explain the accounting conce...

Define accounting.Briefly explain the accounting concepts which guide the accountants at recording stage

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