Basic Concepts In Accounting Essay

723 words - 3 pages

Explaining Basic Concepts and Business Structures
Kristin Elam
March 24th, 2014
Rebecca Kime

Topic 1: Identify and describe the sources of GAAP. Identify source hierarchy and
why it is important.
“Although principles and practices continue to provoke both debate and criticism,
most members of the financial community recognize them as the standards that over
time have proven to be most useful.” (Keiso, et all, 2007, (2007). Financial Accounting,
Ch. 1). Defining standards for financial reporting is critical to creating a financial playing
field that enables us to to evaluate and make sound business decisions as individuals,
companies, a nation, and global ...view middle of the document...

For information to be relevant it must be predictable, have a way to verify it’s
accuracy, past, present, and future, and be reported in a logical timeframe. To en
sure the information is reliable it must be verifiable, transparent, and neutral in it’s
intentions. Lastly, for the information to be useful, it must be understandable. The
people who use the information to make decisions, such as marketing, personnel,
finance, and investor’s have to be be able to understand how the numbers are relevant
to them.
Topic 3: Accrual based and cash based systems
There are two ways to keep records in an accounting system known as
accrual based and cash based accounting. When a company keeps records on cash
based system it records funds when the actual monies are received. With an accrual
based system, funds are recorded when the service is provided. On the accrual system
a company is able to see revenue when the actual service is provided, making it
a more accurate snapshot of the company.
Topic 4: Describe the types of business structures and defining features There are three types of business structures for setting up a company,
sole proprietorships partnerships, and corporations.
The most common form of organization is a sole proprietorship. This is a...

Other Essays Like Basic Concepts in Accounting

Intermediate Financial Accounting Essay

5060 words - 21 pages standards. c. providing professional education programs. d. all of the above. P64. Which of the following pronouncements were issued by the Accounting Principles Board? a. Accounting Research Bulletins b. Opinions c. Statements of Position d. Statements of Financial Accounting Concepts 65. Which of the following organizations has not been instrumental in the development

Costing Methods Essay

2818 words - 12 pages Cost Accounting : An Introduction MODULE - 6B Elementary Cost Accounting 27 COST ACCOUNTING : AN INTRODUCTION After passing your senior secondary examination, if you set up a small manufacturing unit, say manufacturing of packing boxes, a problem will arise what price of each box you should quote to the buyer. Many factors are considered while fixing the price of a product/item such as competitors’ price etc. One of the basic factors is

Reporting Practices and Ethics Standards

969 words - 4 pages of expenses over revenue the result is a loss in profits. A statement of fund balances or net worth occurs once the excess of revenue over expenses flows back into equity or balance. (para. 2) This creates the statement of fund balance/net worth. All of these concepts go together when working with a balance sheet. The statement of cash flow works by using accrual basis accounting. In accrual accounting, revenue is recorded when it is

Case Summaries Accy 401, Emba; Fall 2000

5169 words - 21 pages item, a firm lowers its net income in the current period. By capitalizing the item, a firm would show higher net income in the current period, but lower income in each of the future periods when the capitalized expense is depreciated (fixed assets), amortized (intangible assets), or depleted (mineral assets such as oil or gold). When considering whether to capitalize or expense an item, we considered two accounting concepts: the concept

Bus520 Chapter 15 & 16

1084 words - 5 pages Chapter 15: Understanding Accounting and Financial Statements Introduction The purpose of this chapter is to identify some of the concepts of Understanding Accounting and Financial Statements in the business world. Learning objectives 1. Explain the functions of accounting, and identify the three basic activities involving accounting. 2. Describe he roles played by public, management, government, and not-for-profit accountants. 3

The Underrepresentation Of Blacks In The Accounting Profession

3943 words - 16 pages to avoid accounting as a career” (p. 60). James is saying that black students doubt they have the necessary skills to choose accounting, and as a result black students avoid accounting. The perceived skills necessary for accounting are quan- titative, and include familiarity with, and sureness of, basic mathematical THE YORK SCHOLAR, v. 8.2 (Spring 2012) 15 THE YORK SCHOLAR, v. 8.2 (Spring 2012) and analytical concepts to perform

Mba Incoming Student Assignment

1236 words - 5 pages statements. Given the duration of the term, we will be moving at a fairly rapid pace. The course will begin with a brief overview of the fundamentals of accounting (key accounting concepts, the accounting process, and the principal financial statements) and then move on to study in greater depth the various elements of financial statements. At the end of the course, I expect you will have a good understanding of a company’s financial statements—be

Management Accounting Developments

3336 words - 14 pages under pressure. In his opinion yesterday’s management accounting has always been losing its relevance without almost every-day update. The author himself confirms that “in Japan, management accountants work hard to link their management accounting systems to their companies’ strategies for innovation”. When he still believes in soundness of the basic concepts of traditional accounting, the four new elements constitute the modern vision of management

Business Accounting - Summary of Unit I

1462 words - 6 pages bodies such as Malaysian Institute of Accountants (MIA) have codes of conduct that require high level of ethical behaviour. 1.4 Accounting Framework in Malaysia In the context of Malaysia, you need to be aware of the Accounting Framework and the various organizations related to accounting. Try to read up some basic information about MASB and MIA. The rest you can explore when you have more time. Conclusion for Unit 1 : You need to understand

Hca vs Fva

1327 words - 6 pages Executive Summary Accounting concepts are the rules and guidelines used in accountancy and one of these is the historical cost accounting. This concept is an accounting technique that values an asset on the balance sheet at the price paid for the asset at the time of its acquisition. Moreover, the historical cost accounting is the situation in which accountants record revenue, expenditure and asset acquisition and disposal at historical

Key Financial Relationships: FedEx And UPS

1283 words - 6 pages The review of the financial statements of FedEx and UPS showed that each company has built a healthy financial empire. This paper will discuss the key financial relationships that exist between the two companies. The inter-relationships that the data illustrates in each company's financial statements will be examined. The key components of the basic accounting equation will be located for each company, as illustrated in their respective

Related Papers

Basic Accounting Concepts Essay

702 words - 3 pages Basic Accounting Concepts and Business Structures The major sources of Generally Accepted Accounting Principles (GAAP) are: FASB Standards, Interpretations, and Staff Positions; APB Opinions and AICPA Accounting Research Bulletins. The hierarchy of GAAP provides guidance in preparing financial statements and is divided into four categories. Category A represents the major sources of GAAP, and Category D the least authoritative. Companies

Explaining Basic Accounting Concepts And Business Structures

667 words - 3 pages Explaining Basic Accounting Concepts and Business Structures The Hierarchy of Generally Accepted Accounting Principles identifies the sources for the accounting standards and principles. These sources include “FASB Standards, Interpretations, and Staff Positions; APB Opinions; and AICPA Accounting Research Bulletins” (Kieso, Weygandt, & Warfield, 2007, p. 12). When companies prepare financial statements in accordance with GAAP, they

The Fundamental Accounting Concepts And The Role Of Financial Accounting In Aiding The Decision Making Processes Of Four Different Non Management Stakeholder Groups

2455 words - 10 pages financial accounting seeks objectivity, and of course it must have rules which lay down the way in which the activities of the business are recorded. These rules have long been known as accounting concept (Wood et al, 1999). These concepts are used as guidelines for how the final accounts should be drawn up (Horner, 2000).These basic concepts should be followed by accountants when producing financial statements. These concepts have evolved over time

Reviewing Accounting Standards

987 words - 4 pages Word Count: 958 The purpose of this guide is to provide guidance to accounting students on the application of accounting standards. In order to do this, a brief outline of the Accounting Standards together with the Framework will be given along with an example to illustrate how to use the Accounting standards and the appropriate accounting treatment. The Accounting Standards provide a specific way in which accounting concepts are to be