Accounts
Accounting systems have been used for thousands of years. As businesses grew, people to keep track of costs, profits, and losses invented accounting systems. Modern accounting measures and communicates financial information about an economic entity. This information is used to plan, control, evaluate, and make decisions about a business. The process begins with bookkeeping, which records transactions, such as checks and invoices, and summarizes these transactions in financial statements. Financial managers use the financial statements to raise and spend cash and make intelligent financial decisions. This section defines accounting and contrasts it with bookkeeping and finance functions.* Accounting is an information system that measures, processes, and communicates financial information about an identifiable economic entity.* Bookkeeping, primarily a mechanical and repetitive record keeping function, is a subset of accounting.* Finance is concerned with raising and using cash.* Accounting supplies information about the company to financial managers so they can make intelligent financial decisions.* Accounting enables managers to intelligently plan and control the business and make
6) The FASB is committed to following an open, orderly process for standard setting that precludes placing any particular interest above the interests of the many who rely on financial information. The IASC Foundation Trustees appoint the IASB Members, exercise oversight and raise the funds needed, whereas IASB has sole responsibility for setting accounting standards. It's important for you to understand the basics of the two principal methods of keeping track of a business's income and expenses: cash method and accrual method (sometimes called cash basis and accrual basis). This hierarchy helps to ensure that data is "Present[ed] Fairly in Conformity with Generally Accepted Accounting Principles. In a nutshell, these methods differ only in the timing of when transactions both sales and purchases are credited or debited to your accounts. The FASB actively solicits the views of its various constituencies on accounting issues. If you use the cash method, income is counted when cash (or a check) is actually received and expenses are counted when actually paid. "Who develops GAAP?1) The period from 1939 to 1959: The Committee on Accounting Procedure (CAP) of the American Institute of Certified Public Accountants (AICPA). Under her accrual system of accounting, she counts the $400 expense during the December 2002 accounting period, even though she didn't actually write the check until January of the next year. The cash and accrual methods can produce the same results. However, the ultimate determinant of concepts and standards must be the Board's judgment, based on research, public input and careful deliberation about the usefulness of the resulting information. The IASB structure has the following main features: the IASC Foundation is an independent organisation having two main bodies, the Trustees and the IASB, as well as a Standards Advisory Council and the International Financial Reporting Interpretations Committee. The IASC Foundation is the parent entity of the International Accounting Standards Board, and independent accounting standard setter based in London, UK. Reviewed or audited modified cash basis financial reports should include the same items required of GAAP financial statements.
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Acceptance Essays
