We have more understanding why it is important to recognize revenues and the different revenues that an accountant has to look for. It is very important to know this because as an accountant we will be accountable for any discrepancy. I also learned more about GAAP and how the rules apply to accounting. Some of us are still kind of confused of GAAP, but reading more about gives deeper understanding. Not following the rules and regulations of GAAP will cost your license and possible jail time. Some of the rules of financial reporting have changed within 20 years and will continue to change especially when companies find loopholes to avoid following regulations. These companies usually are audited. We now have a better understanding about cash flow statements and that they are very important to any companies. This statement will show users where is the money is coming from and where is going.

This week focused on income specifically; when does a company report it. The criteria are realized when payment is received for services or products, but this in turn is where companies have had problems. That combined with the multitudes of business and we can see where issues arise when time comes to post.

We also reviewed on what qualifies as an irregular posting. For some of us this was easier to wrap our brains around as the rules state; that if the posting is not in regular operations, then it can be considered irregular. Some of us can see how that can be a problem especially after a rare change such as accounting principal.

We finally reviewed comprehensive income; what it includes and how it is reported. FASB rules are clear on how it should be reported in the form of a second income statement, to name an example. This week’s readings were easy for most of us and we look forward to the next challenge.

This week reflection summary includes income statement