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GAAP help to ensure that financial information fairly presents a firm's operating results and financial position.GAAP 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.
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What is the relevance of the accounting principles in the accounting practice?
There are general rules and concepts that govern the field of accounting. These general rules-referred to as basic accounting principles and guidelines-form the groundwork on which more detailed, complicated, and legalistic accounting rules are based. For example, the Financial Accounting Standards Board (FASB)uses the basic accounting principles and guidelines as a basis for their own detailed and comprehensive set of accounting rules and standards.The phrase "generally accepted accounting principles" (or "GAAP") consists of three important sets of rules: (1) the basic accounting principles and guidelines, (2) the detailed rules and standards issued by FASB and its predecessor the Accounting Principles Board (APB), and (3) the generally accepted industry practices.If a company distributes its financial statements to the public, it is required to follow generally accepted accounting principles in the preparation of those statements. Further, if a company's stock is publicly traded, federal law requires the company's financial statements be audited by independent public accountants. Both the company's management and the independent accountants must certify that the financial statements and the related notes to the financial statements have been prepared in accordance with GAAP.GAAP is exceedingly useful because it attempts to standardize and regulate accounting definitions, assumptions, and methods. Because of generally accepted accounting principles we are able to assume that there is consistency from year to year in the methods used to prepare a company's financial statements. And although variations may exist, we can make reasonably confident conclusions when comparing one company to another, or comparing one company's financial statistics to the statistics for its industry. Over the years the generally accepted accounting principles have become more complex because financial transactions have become more complex.RelevanceRelevance requires that the financial accounting information should be such that the users need it and it is expected to affect their decisions.Reliability requires that the information should be accurate and true and fair.Relevance and reliability are both critical for the quality of the financial information, but both are related such that an emphasis on one will hurt the other and vice versa. Hence, we have to trade-off between them. Accounting information is relevant when it is provided in time, but at early stages information is uncertain and hence less reliable. But if we wait to gain while the information gains reliability, its relevance is lost.ExamplesAfter the balance sheet date but before the date of issue a company wants to dispose of one of its subsidiaries and is in final stages of reaching a deal but the outcome is still uncertain. If the company waits they are expected to find more reliable information but that would cost them relevance. The information would be outdated and no longer very relevant.After the balance sheet date during the time when audit is carried out, it becomes clear which debts were realized and where were not hence it improves the reliability of allowance for bad debts estimate but the information loses its relevance due to too much time being taken. Timeliness is key to relevance.
What is accounting misconduct?
Accounting misconduct is a phrase used to describe when someone purposely messes up the books within a business. The usual reason for this is so the person can gain access to money for their own personal use.
What does Net 30 Prox mean?
The phrase Net 30 prox is used in the accounting field. It means that a buyers payment is due 30 days from the day they receive the shipment.
What is mean of debit?
A bookkeeping and accounting term, indicating an entry made in the left hand column of the ledger. Debit is the opposite of credit. In common use the phrase 'debit my account' is an instruction to charge a sum of money against the account.
Is cash on demand a standard term for accounts receivable?
No, the phrase "cash on demand" is not a standard term for accounts payable in accounting terminology. Cash on demand is a term used when using payday loans or other types of loaning operations. It is typically a high interest, quick payback loan.
Generally accepted in the phrase generally accepted accounting principles means that the principles?
in the phrase generally accepted accounting principles means
What is the relevance of the accounting principles in the accounting practice?
There are general rules and concepts that govern the field of accounting. These general rules-referred to as basic accounting principles and guidelines-form the groundwork on which more detailed, complicated, and legalistic accounting rules are based. For example, the Financial Accounting Standards Board (FASB)uses the basic accounting principles and guidelines as a basis for their own detailed and comprehensive set of accounting rules and standards.The phrase "generally accepted accounting principles" (or "GAAP") consists of three important sets of rules: (1) the basic accounting principles and guidelines, (2) the detailed rules and standards issued by FASB and its predecessor the Accounting Principles Board (APB), and (3) the generally accepted industry practices.If a company distributes its financial statements to the public, it is required to follow generally accepted accounting principles in the preparation of those statements. Further, if a company's stock is publicly traded, federal law requires the company's financial statements be audited by independent public accountants. Both the company's management and the independent accountants must certify that the financial statements and the related notes to the financial statements have been prepared in accordance with GAAP.GAAP is exceedingly useful because it attempts to standardize and regulate accounting definitions, assumptions, and methods. Because of generally accepted accounting principles we are able to assume that there is consistency from year to year in the methods used to prepare a company's financial statements. And although variations may exist, we can make reasonably confident conclusions when comparing one company to another, or comparing one company's financial statistics to the statistics for its industry. Over the years the generally accepted accounting principles have become more complex because financial transactions have become more complex.RelevanceRelevance requires that the financial accounting information should be such that the users need it and it is expected to affect their decisions.Reliability requires that the information should be accurate and true and fair.Relevance and reliability are both critical for the quality of the financial information, but both are related such that an emphasis on one will hurt the other and vice versa. Hence, we have to trade-off between them. Accounting information is relevant when it is provided in time, but at early stages information is uncertain and hence less reliable. But if we wait to gain while the information gains reliability, its relevance is lost.ExamplesAfter the balance sheet date but before the date of issue a company wants to dispose of one of its subsidiaries and is in final stages of reaching a deal but the outcome is still uncertain. If the company waits they are expected to find more reliable information but that would cost them relevance. The information would be outdated and no longer very relevant.After the balance sheet date during the time when audit is carried out, it becomes clear which debts were realized and where were not hence it improves the reliability of allowance for bad debts estimate but the information loses its relevance due to too much time being taken. Timeliness is key to relevance.
What is the participle phrase in sighing loudly Kristen accepted her punishment?
"Sighing loudly" is the participle phrase in the sentence "Sighing loudly, Kristen accepted her punishment." It describes how Kristen accepted her punishment.
How do you use the phrase readily accepted in a sentence?
Her bohemian ideals were not readily accepted in Victorian times.
What is a opposite word of the phrase refused to allow?
accepted?
What is the etymology of the word 'accounting'?
From the phrase a cow thing which means "something about cows"
Is accepted a preposition as in accepted an award?
No, it is not a preposition. In 'accepted an award' you have a past tense verb and its object. There is no preposition or prepositional phrase.
What is meant by the phrase 'accounting profit'?
Profit that is made by superb accounting. By using the accounting trade, money is saved that would have been lost without it. However I am supposed to reach 150 characters.
What is the participle phrase in this sentence sighing loudly Kristen accepted her punishment?
the participle phrase in this sentence is "sighing loudly."
Where does the phrase coming up threes come from?
It is generally accepted as referring to the fact that a three rolled in most dice games is a losing roll; "keeps coming up threes" is a run of bad luck
Which enlightenment principles is most clearly in this phrase from the declaration of independence?
We don't have the phrase you were given so we can't answer the question.
What is meant by the phrase receivable financing?
The phrase 'receivable financing' is an accounting term and it means the amount of money that you will be getting from a client. You will be receiving finances from somebody.
