Williams University of Phoenix ACC/280-Principles of Accounting Carol Demuth Jun 22, 2011 Financial Statement Paper Businesses today need to run quickly, efficiently, and have smaller margin for error than ever before. To keep up with the fast paced world around them, companies must assure things run as smoothly as possible to have a chance at competing with their competitors. One of the biggest details that have to be correct is the company’s accounting. Getting the numbers right isn’t just
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generally accepted accounting principles (GAAP) that are practiced by companies to create and release their annual finances. The financial statements allow the outside entities to judge the economic health of the company and from this decide if investments and larger lines of credit are wise. In the United States the Security and Exchange Commission enforce the GAAP although it is not actual law. The GAAP can be broken down into three sections which are assumptions, principles, and constraints. There are
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the objective of financial reporting. Identify the qualitative characteristics of accounting information. Define the basic elements of financial statements. •6 •7 Describe the basic assumptions of accounting. Explain the application of the basic principles of accounting. Describe the impact that constraints have on reporting accounting information. •8 •5 What Is It? Everyone agrees that accounting needs a framework—a conceptual framework, so to speak—that will help guide the development
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qualities GAAP has four basic assumptions, four basic principles, and four basic constraints. Assumptions * Accounting Entity: assumes that the business is separate from its owners or other businesses. Revenue and expense should be kept separate from personal expenses. * Going Concern: assumes that the business will be in operation indefinitely. This validates the methods of asset capitalization, depreciation, and amortization. Only when liquidation is certain this assumption is not applicable. The
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Exercise 2-7 1. Economic entity assumption (45) - (f) indicates that personal and business record keeping should be separately maintained. 2. Going-concern assumption (46) - (d) Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) 3. Monetary unit assumption (46) - (j) assumes that the dollar is the “measuring stick” used to report on financial performance. 4. Periodicity assumption (46) - (g) separates financial information
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Running Head: Introduction to Accounting 1 Introduction to Accounting Jesse Vitkow ACC/280 1/18/2012 Maria Aurora Makalintal – Torio The public be damned; I am working for my stockholders William Vanderbilt The beginning of accounting can be attributed to a time period of the Renaissance. In the late 1400’s, Italy was a dominating factor when it came to
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CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL ACCOUNTING Show Me the Earnings! The growth of new-economy business on the Internet has led to the development of new measures of performance. When Priceline.com splashed onto the dot-com scene, it touted steady growth in a measure called “unique offers by users” to explain its heady stock price. To draw investors to its stock, Drugstore.com focused on the number of “unique customers” at its website. After all, new businesses call for new performance
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Assumptions, Principles, and Constraints of accounting Financial Accounting University of Phoenix Denise Evans 1 Author Note 2 This research is submitted on May 10th 2013 for Constance Poyner Financial Accounting course at University of Phoenix College by Denise Evans Accounting is a subject that we deal with in our lives it can be professional or personal. A companies accounting deals with so much, and it has to be very accurate at all
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US companies face convergence between US GAAP and IFRS that affecting several major accounting standards. On the other hand, IFRS conversion warrants consideration which already impacting business decisions, and not simply through non-US subsidiaries. IFRS has already influence US GAAP, under the Memorandum of Understanding (MoU), the Financial Accounting Standard Board (FASB) and the International Accounting Standard Board (IASB) are working jointly to develop standards that will converge and
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| encourages innovation. | | provides an efficient and liquid market for buying and selling securities. | | All of the options are correct. | Self Test, Question 3 | | | | Correct. | | | Challenges facing financial accounting include all of the following except: | soft assets. | | timeliness. | | forward-looking information. | | financial measurements | Self Test, Question 4 | | | | Correct. | | | All of the following are objectives
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