Advantages The direct write-off method is simple, and can be used by individuals that maintain a company's set of books yet have no extensive accounting education. Unlike the allowance method that estimates probable losses using various ratios and factors, the direct method is based on an actual amount which may be more superior to the small business owner. Disadvantages Since the direct write-off method records the loss only when the account is determined uncollectible, it may result in a loss
Words: 2113 - Pages: 9
controller Marty Fuller, and called the accounting department for a solution. Reed’s bottom line is very straight forward: find a creative way to record the sales to Data Equipment Systems before December 31, 2010. Legal Issues and Applicable Laws The accounting team must consider the actions that will take place under the restrictions of laws and regulations. In the accounting profession, the regulations included GAAP (Generally Accepted Accounting Principles), SOX (Sarbanes-Oxley Act of 2002), and
Words: 1114 - Pages: 5
Generally Accepted Accounting Principles (GAAP), Sarbanes-Oxley Act of 2002 (SOX), and AICPA code of conduct. The rules impact the mechanism, of financial reporting in the company and also help sin the actions of major principles of accounting. As a result of this, the accounting team must ensure they get the best method that will help in maximizing g the wealth of the shareholders. Albeit the earnings estimates could be gotten through the adoption of illegal treatment of accounting books, it would
Words: 1411 - Pages: 6
Paper Generally accepted accounting principles (GAAP) represent the general rules, standards, and practices that are used in accounting. GAAP are required for businesses when reporting financial records. When preparing financial statements, a company’s accountant is mandated to use these principles before they issue these statements to investors and other entities outside of the business. The objective for these standards are to assist in ensuring that ethical accounting practices occur wherein investors
Words: 737 - Pages: 3
Abstract Accurate accounting and the understanding can make or break your company or organization; not to mention possible jail time in the worse cases. The first way of ensuring accurate accounting is understanding the objectives. The second way is to understand the terminology of the accounting process and in the financial reporting aspects. The third way is to understand the ethics behind the accounting and reporting process. The forth way is to impement your role in the accounting process. Career
Words: 1113 - Pages: 5
US GAAP Acct 522 Current Topics in Financial Reporting Zhipeng Cao CIN: 300443421 Introduction The most influential accounting reporting criteria today is the International Financial Reporting Standards (IFRS) by and U.S Generally Accepted Accounting Principles (U.S. GAAP). These two different accounting standards have various emphases. In short, IFRS states principles and it leaves the decision-making in everyday questions for accountants, while US GAAP consists of very detailed measures.
Words: 2150 - Pages: 9
The two main methods of recording accounting transactions are cash basis accounting and accrual basis accounting. Each method has both advantages and disadvantages. However, only one method is approved by GAAP. Cash basis accounting is the method in which cash receipts and cash payments are recorded during the period in which they occur (Spiceland et. al., p. 7). Under the cash basis accounting method, the revenue is recognized when the cash is received and the expense is recognized when the cash
Words: 575 - Pages: 3
Accounting Cheat Sheet Your AccountingCoach PRO membership includes lifetime access to all of our materials. Take a quick tour by visiting www.accountingcoach.com/quicktour. Table of Contents (click to navigate) Financial Statements 3 Balance Sheet 4 Income Statement 5 Cash Flow Statement 6 Stockholders’ Equity 7 Financial Ratios 8 Accounting Principles 9 Bookkeeping, Debits & Credits 10 Accounting Equation 11 Adjusting Entries 12
Words: 6189 - Pages: 25
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
Words: 22128 - Pages: 89
The World of Accounting ACC/ 291 The Ever Changing World of Accounting 2 The world has evolved over the years; making the lives of people easier and allowing them to become more efficient to meet the demands and growing population. In the not so distant future, some of the World’s people will make another change, so that the accounts they use will make the way they do business with other will become even more well-organized and capable of trading and buying from those they have not been
Words: 896 - Pages: 4
