0
GAAP allows for the fair comparison of accounting information. GAAP allows the work of the accountant to be scrutinized and analyzed on an even level with other similar firms. It allows for greater transparency in accounting practices.
Wiki User
∙ 9y ago
Wiki User
∙ 9y agoThe gaap principles are a standard framework for the reporting of financial information. The purpose of gaap is to make financial information easy to understand for individuals and businesses. Financial reporting methods can have an impact on the interpretation of results. Gaap eliminates confusion.
Wiki User
∙ 16y agoGAAP is important for uniformity reasons. Any where in the world as long as the two companies are operating in the same industry you can easy compare them simple because of GAAP. Thank you
Wiki User
∙ 15y agoGAAP help to ensure that financial information fairly presents a firm's operating results and financial position.
Add your answer:
Earn +20 pts
What does the Financial Accounting and Reporting section of the Uniform CPA Examination consist of?
This section deals with generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities, and the skills needed to apply that knowledge.
Why is hierarchy of generally accepted accounting principles needed?
Accounting and financial reporting guidance is provided not only by the two major accounting standards-setting bodies, but also by the AICPA, the staffs of the accounting standards-setting bodies, and even professional literature. Because of the heavy workloads of the standards-setting bodies, they may not have issued guidance on a particular issue of concern to a practitioner. A hierarchy of generally accepted accounting principles allows a practitioner to look to the guidance of other bodies in the event the Board with jurisdiction has not issued a standard on a particular matter.
Does GAAP require a physical inventory Why?
GAAP stands for generally accepted accounting principles, and a physical inventory is needed when using GAAP. One reason it is necessary is, if you don't account for your shrinkage by doing a physical count, your total ending inventory costs will be inflated.
What schooling is needed to get an accounting certificate?
Generally a two-year program is required to get an accounting certificate, though the exact requirements do depend on the institution and the education history of the individual. Classes generally cover auditing, financial accounting, business communication, individual income tax accounting, and general applications of accounting.
Is accounting needed to become a doctor?
Accounting is not needed to be a doctor.
What are the distinguishing features of managerial accounting?
How would you describe the difference between financial and managerial accounting? First, the primary users of reports in financial accounting is external users: stockholders, creditors, and regulators. The primary users of managerial accounting is internal users: officers and managers. Second, the types and frequency of reports for financial accounting uses financial statements and they are quarterly and annually. Managerial accounting uses internal reports and as frequently as needed. Third, the purpose of reports for financial accounting is general-purpose and managerial accounting is special-purpose for specific decisions. Fourth, content of reports for financial accounting is limited to double-entry accounting and cost data, highly aggregated (condensed), pertains to business as a whole, and generally accepted accounting principles. Managerial accounting is extended beyond double-entry accounting to any relevant data, very detailed, pertains to subunits of the business, and standard is relevance to decisions. Last, financial accounting verification process is audit by CPA and managerial accounting verification process is no independent audits.
What are the Needs for accounting standards?
The term standard denotes a discipline, which provides both guidelines and yardsticks for evaluation. As guidelines, accounting standard provides uniform practices and common techniques of accounting. As a general rule, accounting standards are applicable to all corporate enterprises. They are made operative from a date specified in the standard. Accounting is the art of recording transactions in the best manner possible, so as to enable the reader to arrive at judgments/come to conclusions, and in this regard it is utmost necessary that there are set guidelines. These guidelines are generally called accounting policies. The intricacies of accounting policies permitted Companies to alter their accounting principles for their benefit. This made it impossible to make comparisons. In order to avoid the above and to have a harmonised accounting principle, Standards needed to be set by recognised accounting bodies. This paved the way for Accounting Standards to come into existence.
Is accounting needed for computer programming?
No
What classes are needed to earn a degree in MIS?
Classes that are required are: Accounting, Economics, Business law, Systems Analysis and Design, Database Programming, Networks Administration, Principles of Management, Technical Writing, and Marketing.
Audit risk in detecting fraud while preparing financial reports and the measures to reduce those fraud?
The audit risk in detecting fraud while preparing financial reports is the fact that the auditors were not able to actually verified to the best of their abilities the source or sources of information indicated in the financial statements. It is very important that the auditors must be independent and must be free to do everything needed to provide the user of the financial reports an opinion that must be base on generally accepted accounting principles and standard auditing practice.
What kind of maths is needed for accounting?
Fundamental math skills are needed for a job in accounting. An accountant must know how to add, subtract, divide, multiply, and do fractions.
Why are adjusting entries needed at the end of accounting period?
Adjusting Entries are journal entries that are made at the end of the accounting period, to adjust expenses and revenues to the accounting period where they actually occurred. Generally speaking, they are adjustments based on reality, not on a source document. This is in sharp contrast to entries during the accounting period (such as utility bills or fees for services rendered) that depend on source documents.
