Generally Accepted Accounting Principles

The accounting educators, the major accounting firms, the American Institute for CPAs (AICPA), and the accounting textbook publishers have recognized that the shift from a rules-based approach to a principles-based approach will require the preparers and auditors of financial statements to utilize more critical thinking skills and to be used to working with ambiguity in the absence of detailed and highlighted accounting standards as in GAAP The AICPA Board of Examiners have decided to test…

The accounting standards that Sears should use for decision making are the Generally Accepted Accounting Principles (GAAP). According to GAAP, accounts receivable must be reported on the balance sheet at net realizable value. This means the item should be listed at the amount the company can reasonable assure…

Financial and managerial accounting are both important accounting aspects to effectively manage a company. Financial accounting are reports that are mainly used by external stakeholders of a company. Managerial accounting is mainly used by management of a business to help them make informed decisions. While both forms of accounting provide different information for different uses, they both provide important financial information that describes the financial wellness of an organization. Both…

Introduction The following research paper is about the new joint revenue recognition principles that were unveiled by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), which standardizes generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) on recognition of revenue in the United States. The new joint revenue recognition principle was created to increase the financial transparency and the…

debiting bad debt expense and then taking the accounts receivable account and crediting it. 2. Explain the reasons why one of these methods is preferable to the other and the reasons why the other method is not usually in accordance with generally accepted accounting…

concise, the Financial Accounting Standards Board (FASB) created the Generally Accepted Accounting Principles (GAAP) which is a set of standards that includes a set of codes that provide structure and organization. (Spiceland, Sepe, & Nelson, 2013, pg. 10) Similarly, international countries have created their own set of accounting standards. However, in the past few decades, the United States and other countries have been getting into business with each other. The accounting standards between…

Evaluate any damaging financial and ethical repercussions of failure to include the inventory write-downs in the financial statements. Prepare a recommendation to the CFO, evaluating the negative impact of a civil fraud penalty on the corporation as a result of the IRS audit. In the recommendation, include essential internal control procedures to prevent fraudulent financial reporting from occurring, as well as the major obligation of the CEO and CFO to ensure compliance. Inventory write-downs…

The fair value and historical cost are fundamental approaches of accounting. They bring up major changes in the financial status of the entities. The main objective of financial reporting is to provide information on assest and liabilities about the particular entity, which helps it to make useful financial decision. The fair value (FV) is a common among accounting and finance professionals. Today the majority of the investors and creditors prefer FV. On the other hand these policy and…

Financial accounting is used to keep track of money movement within an organization. Businessmen and women must have some familiarity with the world of accounting to prevent problems or mistakes from getting out of control. In the global market of today, an organization’s inability to accurately report financial standing can cause major ripples through the global economy. An underperforming accounting department can ruin a business’ prospects for success in the future. Business leaders must…

within the Principles of the Code of Professional Conduct. In order to maintain faith of the public that reposes in them and allow members to continually demonstrate their dedication to professional excellence.(AICPA 2014 p. 5) The Generally Accepted Accounting Principles(GAAP), is a common set of accounting principles, authoritative standards and procedures that companies use to gather their financial reports. GAAP is the standard industry for accountants to record and report accounting and…