Question No. 1 : Explain using various examples‚how the major accounting concepts are used in preparing financial statements. Answer : There are several accounting concepts that are used by the accountants worldwide in preparing financial statements.Using these principles one can prepare a fair and accurate financial statement for a period that would reflect the true condition of the business. Among all the accounting principles‚there are some very important fundamental
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to see what the mathematician and Father of Accounting (Luca Pacioli) saw in 1494 when he codified the double-entry bookkeeping system. It is his codified system that outlined the rules for applying debits and credits when recording the financial transactions of a business in the double-entry bookkeeping system. Now remember that Luca’s book in 1494 was written and published in Latin and at a time when the concept of negative numbers was not yet accepted in Europe. So he spoke of the terms ‘Debere’
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Principles of Accounting 1 Christina Doty American InterContinental University January 9‚ 2013 Dear Dad‚ I’m writing this letter in the hopes that I can help you better understand accounting‚ and use your new software more efficiently‚ and accurately. I know accounting can seem frustrating‚ tiresome‚ and difficult to learn or comprehend. I will explain things so that you will be able to understand them. Dad you need to understand what accounting is‚ Accounting is the process of keeping
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Generally Accepted Accounting Principles Health care organizations financial statements are the key tools to show the economic stability of an organization and guide leadership in making informed decisions. The Generally Accepted Accounting Principles (GAAP) is basic assumptions‚ and principles of accounting to determine the financial position of an organization. These principles offer consistency across health care organizations‚ and businesses maintaining track of the organizations fiscal
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Chapter 1 Financial Accounting and Accounting Standards Intermediate Accounting‚ 15th Edition Kieso‚ Weygandt‚ and Warfield 1 Financial Statements and Financial Reporting • Goals or purpose of (financial) accounting – Identification‚ measurement‚ and communication of financial information about – An economic entity to – Interested Parties (internal and external) • Creditors‚ managers‚ unions‚ government agencies Financial reports (statements) & notes 2 Financial Statements
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The world of accounting opens doors of opportunity for investors‚ stockholders and many businesses and organizations. However‚ accountants must follow guidelines established by “The American Institute of Certified Public Accountants”. (AICPA) Council designated the Federal Accounting Standards Advisory Board or (FASAB) as the body that establishes generally accepted accounting principles (GAAP). Accounting Standards GAAP is considered to be collection of methods used to prepare‚ process and
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Financial Accounting Part I Textbook for Class XI © no N C tt E o R be T re pu bl is he Accountancy d ISBN 81-7450-507-5 First Edition February 2006 Phalguna 1927 Reprinted October 2006 Kartika 1928 October 2007 Kartika 1929 January 2009 Magh 1930 January 2010 Magha 1931 January 2011 Magha 1932 PD 90T RPS © National Council of Educational Research and Training‚ 2006 ALL RIGHTS RESERVED No part of this publication may be reproduced‚ stored in a retrieval system or transmitted‚
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our businesses were to choose a cash basis accounting method‚ they would record revenue when payments were received and they would record costs when payments were remitted. Payable and receivable entries would not be used since future payments would not be recorded and an inventory entry would not be needed as well. The merchandise purchased for resale or the materials purchased for use in the manufacturing of products would be recorded as an expense in the accounting period in which those purchases
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opinion * A qualified opinion report can result from a limitation on the scope of the audit or failure to follow generally accepted accounting principles Adverse opinion * It is used only when the auditor believes that the overall financial statements are so materiality misstated or misleading that they do not present fairly the financial position or results of operations and cash flows in conforming with GAAP. Disclaimer of opinion * It is issued when the auditor is unable to be satisfied
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QUESTIONS 1. The cash basis of accounting reports revenues when cash is received while the accrual basis reports revenues when they are earned. The cash basis reports expenses when cash is paid while the accrual basis reports expenses when they are incurred (and matched with revenues they generated). 2. The accrual basis of accounting generally provides a better indication of company performance and financial condition than does the cash basis. Also‚ the accrual basis increases the comparability
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