Generally Accepted Accounting Principles

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    Accounting calls for the use of estimates in the preparation of the required financial statements. Estimates in this case relate to the use of precise amounts in financial statement elements that cannot be precisely determined. Therefore the amounts are subjective and lack precision because they are plagued by the use of subjective management foresight to determine the values utilized in the financial reports. Where the use of estimates is encouraged there is definitely a lack of accuracy and reliability of the financial information provided (Lev 2016). Some of the typical examples (Table I) of accounting estimates include valuation of securities, obsolete inventory, impairment costs attributed to noncurrent assets and the useful lives…

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    Generally Accepted Accounting Principles The Standards issued by the policy-setting policies are known as the Generally Accepted Accounting Principles (GAAP). These principles address recognition, measurement and disclosure of economic activity. Recognition occurs when an entity records an item on the financial statements or source documents, measurement addresses how the item is recorded in the financial statement, and disclosure involves items that are not recorded in the financial statements.…

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    The Generally Accepted Accounting Principles also known as GAAP was adopted by the U.S. Securities and Exchange Commission (SEC). GAAP is a set of accounting principles public companies have to follow when preparing financial statements that are useful for creditors and investors. Financial Accounting Standards Board (FASB) has developed a framework to increase the effectiveness of disclosure footnotes. The financial disclosures can be required by GAAP or by the management team when preparing…

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    Gaap Vs Ifrs

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    In this paper I will be comparing and contrasting the key differences and similarities of the two the International Reporting Standards (IFRS) and Generally Accepted Accounting Principles also known as GAAP. According to AICPA International Reporting Standards can be defined as “a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.” International Financial…

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    Revenue Recognition

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    means of generating profits and increasing equity. Revenue recognition is an accounting principle under generally accepted accounting principles (GAAP) that determines the specific conditions under which revenue is recognized or accounted for. Generally, revenue is recognized only when a specific critical event has occurred and the amount of revenue is measurable. The FASB has accepted that current Generally Accepted Accounting Principles (GAAP) involve complex and disparate revenue recognition…

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    This paper will cover the following topics: P&G’s revenue recognition policies, the impact of trade promotions on P&G’s financial statements, two examples in which historical cost information is reported in P&G’s financial statements, two examples of the use of fair value information reported, how we can determine the accounting principles used by P&G, what is P&G’s accounting policy related to advertising, what accounting principle does P&G follow regarding accounting for advertising, and where…

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    Accounting is an extensive recording of financial transactions relating to business. It is important to any business because it is the primary function that help measures a company's profit. Financial statements are prepared using the generally accepted accounting principles (GAAP). It is a detailed breakdown of a company's operations, financial state, and cash flows. In order to accomplish the mission of Durango Manufacturing Company being successful, you should refer to financial management…

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    Carp Case Study

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    a) The committee on accounting procedure, CAP, that has been in operation from 1939m to1959, was a natural development of the AICPA(then known as AIA)Committee, that was in existed during 1933 to 1938. The committee was formed as a result of the financial crisis that were experienced during 1929 and the years after that. The power to issue pronouncements on matter of accounting principles and procedure was based on the grounds that AIPCA had the power to establish practices that would be…

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    Various accounting bodies establish their own ethics board that is in charge of creation and implementation of ethical standards. In America, these guidelines are established by the ethics committee of the American Institute of Certified Public at domestic level, with contribution of state level establishments. Execution of these ethical guidelines is performed by these bodies and by other legal bodies including SEC. Many accountants and firms have been punished by these bodies for their…

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    Assessment 3 The modified cash basis of accounting uses elements of both the cash basis and accrual basis of accounting. The cash basis you recognize a transaction when there is either incoming cash or outgoing cash. The receipt of cash from a customer triggers the recordation of revenue, while the payment of a supplier triggers the recordation of an asset or expense. The accrual basis you record revenue when it is earned and expenses when they are incurred, irrespective of any…

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