...The FASB is working on a standard, “The Hierarchy of Generally Accepted Accounting Principles,” that defines the meaning of generally accepted accounting principles. This standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements. The standard categorizes the major sources of GAAP as follows: FASB Standards, Interpretations, and Staff Positions; APB Opinions; and AICPA Accounting Research Bulletins (Kieso,D.E., pp.12) As stated in FASB Concepts Statement No.2, “the qualities that distinguish better” (more useful) information from “inferior” (less useful) information are primarily the qualities of relevance and reliability, with some other characteristics that those qualities imply (Kieso,D.E., p.11).Good accounting information is described as the primary and secondary qualities which are relevance, reliability, verifiable information, comparability and consistency are all important. Relevance is important since it must have a bearing on a decision. Otherwise the information is useless to the user. Reliable information is verifiable, a faithful representation, and is reasonably free of error and bias. Verifiable information allows varies individuals to reach the same conclusions about the same information. The same conclusion must be met if not the information is not verifiable. Information that is useful, accurate, and tested is what investors trust they are receiving from quality...
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...Basic Accounting Concepts and Business Structures University of Phoenix ACC/537 Jeffrey Collins October 2, 2011 Basic Accounting Concepts and Business Structures In the current economic condition of the country, a business must follow certain rules and regulations in regard to their Basic Accounting and structure. This would be what is called the Generally Accepted Accounting Principles (GAAP). These principles ensure that the accounting practices of a business are consistent with other businesses. When investors look at the financials for a business, the information needs to be relevant and reliable. According to the text, GAAP is a common set of standards used in the accounting industry that are a given practice and are accepted as appropriate through universal application (Kieso 2007). There are four organizations that are involved with the development of these GAAP standards. They are the Securities and Exchange Commission (SEC), American Institute of Certified Public Accountants (AICPA), Financial Accounting Standards Board (FASB), and the Government Accounting Standards Board (GASB). This hierarchy is important to maintain the current standards, develop new standards, and uphold these rules and regulations across for boards for reasons of legality and conformity. The GAAP are used in the industry to make the information on financial statements easier to read and more consistent from business to business. Especially for stock holders or future investors in the...
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...Financial Restatement ACC 537 Financial Restatement The financial statement of Green Mountain Coffee Roasters, Inc. is required to be restated due to several errors in accounting practices. The first error was an overstatement of $7.6 million in inventory over one quarter which accounted for a pre-tax income higher than actual. (Vending Market Watch, 2011) This accounting principle violated was either LIFO, FIFO or average cost as the inventory as the error was a result of an overstatement of consolidated inventory and an understatement of the cost of inventory. As a result, income is overstated, which then means that the stockholder's equity is overstated based on the income = liability + stockholder's equity, which in turn means that the value of the stock will be decreased as it lessens the stockholder's equity. This also affects the income statement and the retained earnings statements since the income will need to be adjusted due to the overstatement of income and therefore the retained earnings, which shows the amounts and causes of changes in retained earnings during the period (Kimmel, Weygandt, & Kieso, 2007) and therefore will be adjusted since the earnings for the period had been misstated. The second error in accounting principles was an overstatement of income due to the change to accounting periods which goes against the time period assumption which has been developed as accounting standard by the FASB. The adjustment of the time frame and...
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...GUIDELINES...............................................................................7 REAR YARD FENCE GUIDELINES ......................................................................................9 PLAY EQUIPMENT GUIDELINES ......................................................................................11 SATELLITE RECEIVER (DISH) GUIDELINES ..................................................................13 GENERAL IMPROVEMENTS, LANDSCAPE & MAINTENANCE GUIDELINES..........14 LIST OF RECOMMENDED PLANT SPECIES ....................................................................19 EXHIBIT A REQUEST FORM 2 CHRISTENBURY MASTER ASSOCIATION, INC. ARCHITECTURAL CONTROL COMMITTEE INTRODUCTION The Architectural Control Committee (ACC) is providing the attached Architectural Design Guidelines (“Guidelines”) in accordance with that Declaration of Covenants, Easements, Conditions and Restrictions (“Declaration”), for purposes of establishing and maintaining exterior design elements throughout Christenbury. This document should be filed with the homeowners’ copy of the Declaration received at closing. It is the responsibility of each homeowner to pass along the Declaration and Guidelines to any future buyer of their home at Christenbury. It is important to note that the Guidelines are applicable to most all future building exterior and property...
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...Jose Cando ENGL-2327 April 26, 2014 Balcones Fiction and Poetry Winners Reading Event: Natalie Diaz’s Reading of When My Brother Was an Aztec Outside the ACC Theater on April 9th, the public was greeted by tables of refreshment including fruits cheeses and crackers which was a nice surprise. Although, I had expected a packed theater, only about forty people were waiting inside. The event started at 6:30 pm when Charlotte Gullick, the chair of the creative a writing department took the stage. After promoting some of creative writing classes at ACC, she described the significance of the Balcones prizes. A teacher from the English department took the stage next to talk a little more about the Balcones prize. He pointed out that Natalie Diaz was the sixteenth winner of this prize. He described Ms. Diaz as a woman with her foot “in three different worlds.” Her childhood was spent on the Mojave reservation in the California Desert. She attended college in Virginia on a basketball scholarship, and from there she played professional basketball in Europe and Asia. After injuring her knee, she left basketball to study poetry in graduate school. Therefore, he claimed, she has a foot in the worlds of the reservation, basketball and poetry. With that, he welcomed Nathalie to the stage. Nathalie jumped into reading her poem, “When My Brother Was an Aztec.” I was shocked to hear the bitterness and resentment in her voice as she describe her brother as a nasty and careless force which...
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...Explaining Basic Concepts and Business Structures Kristin Elam ACC/537 March 24th, 2014 Rebecca Kime Topic 1: Identify and describe the sources of GAAP. Identify source hierarchy and why it is important. “Although principles and practices continue to provoke both debate and criticism, most members of the financial community recognize them as the standards that over time have proven to be most useful.” (Keiso, et all, 2007, (2007). Financial Accounting, Ch. 1). Defining standards for financial reporting is critical to creating a financial playing field that enables us to to evaluate and make sound business decisions as individuals, companies, a nation, and global economy. The major sources of influence that define the guidelines of generally accepted accounting principles (GAAP) are Financial Accounting Standards Board (FASB) Interpretations, and their Staff Positions; Accounting Principles Board (APB) Opinions, and American Institute of Certified Public Accountants' (AICPA). The guidelines followed in the financial industry begin with the most authoritative source, defined as the “GAAP hierarchy”. At the top are FAS statements and AICPA opinions, FASB staff questions and answers and AICPA interpretations. If decisions and information can’t be ascertained by these sources, common practices, opinions, and other publications would fall on the bottom resources of the hierarchy. (Keiso, et all, 2007) Topic 2: Describe effective...
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...The Hartford Insurance Company Financial Accounting ACC/537 12/09/2013 Rebecca Kime, Instructor The Hartford Insurance Company, one of America’s largest investment and insurance companies, was founded in 1810 in Hartford, CN. The company was originally stared as a fire insurance company and its then president, Eliphalet Terry, used his own wealth to cover the company’s damage claims. The Hartford has since expanded its company to include other products and services and no longer requires the company’s president to cover its claims. The Hartford was bought and released by ITT Corporation and has continued to grow since. The Hartford now covers auto, fire and life insurance amongst other things. Throughout the years, the Hartford has continued to grow and succeed so in 2012 when they reported net income of $350 million, it was no surprise to anyone. Unfortunately, that success was short lived as they had to restate their financials for the third quarter of 2012 and it resulted in a net loss of $38 million for the year. According to the Hartford “the error resulted from the omission of the impact of certain reinsurance recoverable balances on the gain/loss calculations for the transaction” (The Hartford Restates Q3; Full-Year 2012 Bottom Line Reverses To A Loss,” 2013,). Looking deeper into the restatement of their financials, it looks as though the error may have also been due in part to error in generally accepted accounting principle calculations. The company sold off...
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...BASIC ACCOUNTING CONCEPTS AND BUSINESS STRUCTURES Derwin N. Johnson ACC/537 OCTOBER 6, 2014 MR. JAMES NEUNER BASIC ACCOUNTING CONCEPTS AND BUSINESS STRUCTURES This paper will discuss the basic accounting concepts and business structures used in today’s business practices. In this paper I will discuss four topics. I. Identify and describe the sources of G.A.A.P. and identify the sources and explain the importance of the hierarchy. II. Describe effective accounting information using the qualities of accounting information . III. Describe how an accrual based and cash basis of accounting differ IV. Describe the types of business structures and the defining features of each structure. When referring to G.A.A.P., (Generally Accepted Accounting Principles), one must identify the sources of GAAP which are the S.E.C., (Securities and Exchange Commission), A.I.C.P.A., (American Institute of Certified Public Accountants), F.A.S.B., (Financial Accounting Standards Board), G.A.S.B., (Government Accounting Standards Board). The S.E.C. was created after the Great Depression of 1929 to increase governmental regulation to the financial community. The A.I.C.P.A. and F.A.S.B. were created with the encouragement of the S.E.C. to have the private and public accounting sector to help establish accounting standards. G.A.S.B. was created to oversee the accounting standards of state, local, and municipal governments, which differ from those of the private sector. The...
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...ACC 537 Basic Accounting Concepts Sources of GAAP There are four bodies who take part in the creation of Generally Accepted Accounting Principles. The first of which is the Securities and Exchange Commission (SEC). Companies that go public must file financial statements with the SEC. The SEC creates a standard of financial statements that the companies must file. The SEC works with the private sector as well by encouraging resolving reporting problems and may also reject standard proposals. The SEC may also issue deficiency letters and stop orders when they believe a company’s financial statements contain errors. The second group responsible for developing GAAP is the American Institute of Certified Public Accountants (AICPA). The AICPA has introduced boards and committees that help develop GAAP. The Committee on Accounting Procedure (CAP) was founded by the AICPA and issued Accounting Research Bulletins that dealt with accounting issues on a problem by problem basis. CAP was eventually dissolved, and the Accounting Principles Board was developed. Their main goal was to create a conceptual framework. It issued APB opinions and was also later dissolved. The third responsible party in GAAP creation is the Financial Accounting Standards Board (FASB). “Its mission is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, which includes issuers, auditors, and users of financial information (Kieso...
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...Business Structures Myriah Shanks ACC/537 July 4, 2011 George Bray Business Structures Starting a new business can be an exciting yet challenging time. One of the important decisions new business owners have to make is, which business structure to use. The three business structures new owners typically chose from are sole proprietorship, partnership, and corporation. This paper will not cover a fourth type of business structure the limited liability company (LLC). Choosing the structure that fits best will help any business achieve its goals and run smoothly. A sole proprietorship is a business owned by one individual. Spouses starting a family business should be aware that only one of them can be considered the sole proprietor of the business, so this should be taken into consideration when choosing a business structure. Transferring ownership of a sole proprietorship can be very difficult but sole proprietorships are easy to set up and maintain. This type of business is totally owner controlled. For tax purposes there is no distinction between the owner as an individual and the business. This means the owner has total liability for the business. Taxes for the business are paid through the owners personal taxes so there is a tax advantage to a sole proprietorship because the total taxes are generally tax total tax paid is lower. The next type of business structure is partnership, which is a business owned by two or more people. Like a sole proprietorship it is...
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...Running Head: Basic Accounting Concepts and Business Structures Basic Accounting Concepts and Business Structures Jeremy Keturi University of Phoenix 03/10/2011 ACC/537 Accounting has multiple forms and concepts depending on the type of business. This paper is going to identify the sources of generally accepted accounting principles; and identify the source of hierarchy with an explanation of why the hierarchy is important. This paper will describe effective accounting, along with the difference between accrual-based accounting from cash basis accounting. The last item discussed will be three business types, structure and their features. “The sources of generally accepted accounting principles (GAAP) are financial accounting standards board (FASB Standards), interpretations, and staff positions, accounting principles board (APB Opinions), and American institute of certified public accountants (AICPA)” (Kieso, Weygandt, & Warfield, 2007). [“The financial accountant standards board (FASB) is the source of the Hierarchy. The Hierarchy of generally accepted accounting principles is a standard that the FASB is working. What the Hierarchy does, it identifies the source of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements”] (Kieso, Weygandt, & Warfield, 2007). Effective accounting is completeness, relevance, accuracy, clarity, properly communicated, timely, and cost efficient. Completeness...
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...Financial Statement Restatement Paper ***** ****** ACC/537 January 13, 2014 Financial Statement Restatement Paper MicroStrategy, Inc. went public in June 2008. It is a software company that had been identified as, “a successful, growing company with positive net income” (Krishnan & Mintz, 2007). Like many managers, the managers at MicroStrategy, Inc. wanted to make a quick profit by using aggressive accounting techniques that artificially boosted revenues, inflated earnings, and raised the stock price of shares. The stock price rose from $20 to $333 in one year after the IPO. The company announced in March 2000, that they were planning to restate financial results for the fiscal years 1998 and 1999 (Krishnan & Mintz, 2007). The company needed to restate its financial statements due to improperly applying early revenue recognition in fiscal periods. The company had been recognizing revenues earlier than what was allowed under GAAP. The company would hold open contracts that had been signed by customers after the close of the quarter until the company obtained the desired quarterly financial results, the company would undersign the contracts and give them an effective date that was in the last month of the previous quarter (Krishnan & Mintz, 2007). The restatement of MicroStrategy, Inc’s financial statements reduced the companies combined revenues for the years 1998 and 1999 to $247 million down from $312 million. About 83 percent of this change was applied...
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...Basic Accounting Concepts and Business Structures Chris Walters ACC 537 May 9, 2011 James T Neuner Basic Accounting Concepts and Business Structures Sources of GAAP and Hierarchy The main sources of GAAP fall into four main categories; A, B, C, and D, with category A as the most authoritative, then B, C, and the least authoritative being D. Category A includes FASB Standards, Interpretations, and Staff Positions, APB Opinions, and AICPA Accounting Research Bulletin Category B contains FASB Technical Bulletins, which are no longer issued, AICPA Industry Audit and Accounting Guidelines, and AICPA Statements of Position. Category C incompasses FASB Emerging Issues Task Force and AICPA AcSEC Practice bullitens. Category D consists of AICPA Accounting Interpretations, FASB Implementation Guides, and widely recognized and prevalent industry practices. All of these comprise to make the “House of GAAP” (Kieso, D., Weygandt, J., & Warfield, T., p. 12) that provides hierarchy and guidance for businesses in determining the correct course of action with accounting issues. Qualities of Effective Accounting Information The two primary qualities of effective accounting information needed by financial statement users are relevance and reliability. Accounting information is relevant when it assist users in making an informed decision, and has a predictive value on events, feedback value on prior expectations, and timeliness. Accounting information has reliability when...
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...Financial Restatement Paper Financial Restatement Paper University of Phoenix ACC/537 After the introduction of the Sarbanes Oxley Act lots of companies have had to submit financial restatements in their financials. This paper is to examine the financial restatements that have been done by Kodiak Energy Inc. over the past several years due to incorrect reporting on the value of their stocks. Kodiak Energy entered into an agreement with to purchase land from Thunder River Energy in exchange for shares of stock in the Kodiak Energy Company. Kodiak Energy issued seven million shares reported to be worth $2.00 per share. The SEC decided to look into this arrangement and soon discovered that the shares offered by Kodiak Energy were worth $2.50 at the time of the purchase. Upon the findings by the SEC, Kodiak Energy offered to file a misstatement in order to acknowledge the misrepresentation of the worth of the shares. Kodiak Energy had filed their financials incorrectly 3 separate times each time with the incorrect values reported on their 10-K and 10-Q, and in response the SEC was not satisfied to allow a simple misstatement to be done to correct these errors. With the SEC continuing the investigation into the financial records of Kodiak Energy because they felt that they offered to file the restatement too quickly and were trying to hide that this was more than just an error on their part but was in...
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...Explaining Basic Accounting Concepts and Business Structures ACC/537 Dec, 5, 2011 Explaining Basic Accounting Concepts and Business Structures The purpose of the paper is to explain basic accounting concepts and business structures. This paper covers four topics, which include the following: 1. Identify and describe the sources of generally accepted accounting principles (GAAP). 2. Describe effective accounting information using the qualities of accounting information. 3. Describe how an accrual-based accounting system is different from a cash-based of accounting 4. Describe the types of business structures and the defining features of each structure. The Sources of Generally Accepted Accounting Principles There are four categories in the house of GAAP, Category A through D. They are also in the order of the hierarchy. There are three major sources of GAAP in Category A. They are Financial Accounting Standards Board (FASB) Standards, Interpretations, and Staff Positions; Accounting Principles (APB) Opinions; and American Institute of Certified Public Accountants (AICPA) Accounting Research Bulletins. They are most authoritative pronouncements. Category B includes FASB Technical Bulletins which is no longer issued, AICPA Industry Audit and Accounting Guides and AICPA Statements of Position. Category C has FASB Emerging Issues Task Force and AICPA AcSEC Practice Bulletins. Category D has the least authoritative pronouncements: AICPA Accounting interpretations...
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