Common assessment - Essay Example

Only on StudentShare

Extract of sample
Common assessment

In the United States, it is the Financial Accounting Standards Board (FASB) that sets the GAAP standards for private firms while it is the IASB sets principles for international accountants (Horngren et al, 2008). Compliance with GAAP is mandatory by every business operating in the USA. Corporations that are public companies are closely monitored by the Securities and Exchange Commission (SEC) to ensure their compliance to GAAP. II. GAAP and description of the accounting principles In the GAAP there exists accounting principles which also serves as measurements of conventions that are significant which are cost recording, revenue recognition and the matching principle. The recognition principle states that a company records revenues in its accounts only when it has earned and realized the revenue (Horngren et al, 2008 p.703). Revenues therefore cannot be recognized if it has not been earned. A second important convention is the matching principle which states that revenues must be linked to the expenses associated with them. Accountants apply the matching principle by identifying the revenue recognized during a period and by linking the expenses to the recognized revenue directly ( Horngren, 2008 p.703). The Cost Principle This GAAP accounting principle states that the recording of cost must be at their fair market price. ...
Download paper


Generally Accepted Accounting Practice Class University Date I. Introduction/Background Information.  Generally Accepted Accounting Principles or GAAP is the collection of the commonly set of rules of accounting standards used for financial reporting…
Author : hansenlavinia

Related Essays

Implications of GCC currency union
The creation of a currency union is centred upon the formulation of a new currency that will be adopted as legal tender for all the member countries that form the union. The process is complex and delicate, since it necessitates the absorption of the national currencies into one, and with this the unification of monetary policy for the union (Krueger, Kamar & Carlotti, 2009). National economic and monetary policy are necessarily implicated, such that the individual states give up to an extent their sovereign right to policy determination insofar as they are constrained by the union.
56 pages (14056 words) Dissertation
Meaning & Significance of Financial Assessment
It helps gain access to fast, independent and reliable financial assessment reports in order to take better decisions. It enables to achieve financial success. Financial assessment is based on past records and future projections. The company can gain much better control over their financial performance by looking at the past in order to help plan and predict the future. A sound financial plan contains a complete picture of the financial health of the business and the viability of strategic plans. It also helps to know whether the company is being run in a proper way during implementation, so...
15 pages (3765 words) Assignment
Risk Assessment and Return Analysis
This paper will provide a comprehensive risk assessment and return analysis of the investment portfolio encompassing investments in Dell, Home Depot, Procter & Gamble, General Electric, IBM bond and Disney. Dell Although the company continues to perform relatively well, Dell is currently competing in a different market in which the company does not have a substantial advantage. Dell thrived in the past because of its product offering as the company concentrated on the sale of desktops that were built on order. Dell sustained low parts inventories to reduce overhead. Furthermore, Dell’s...
3 pages (753 words) Essay
Non-conventional types of dividend payments, particularly share repurchases are in most cases used currently, and therefore, the dividend decision is much more multifaceted and complex than it was in the past. In addition, there are more significant types of shareholders who should be satisfied today-particularly institutional investors-while managers once merely have to satisfy individual stockholders. Therefore, n increase in the dividend payout is taken to be good news. The company is showing that it not only has positive cash flows, however these cash flows are rising sufficiently to...
5 pages (1255 words) Essay
Finance Assessment
In this concept one stocks performance is benchmarked by the performance of another stock. The returns which will be generated are compared relatively to other stocks of similar nature operating in the markets (Gitman, 2003). The major difference between both the absolute and relative return is that absolute return is concerned about the returns which are generated from one particular asset or stock, whereas in relative return the stock is compared or benchmarked with the measures of other stocks. The most debated concept of Security Analysis and Portfolio Management is about the understanding...
13 pages (3263 words) Essay
Accounting Final Common Assessment Paper
This is also carried out to ensure that the information provided by the accounting function is meaningful and relevant to its users. Every organization does have an accounting function to assist in recording and reporting of financial information generated from different activities of the business. The data processed by the accounting function can be useful to users of this information in many ways. This paper looks at the role of accounting in organizations and its importance in terms of managing a business. Furthermore, it will delve the usefulness of the accounting information generated the...
4 pages (1004 words) Essay
Practical and Written Assessment
As far as the profitability of the company was concerned, it has been quite impressive in past decade in the automotive industry, as the growth and profit margin of the company in Figure 1 reveals. Figure 1: Growth of Profit and Margin of Porsche Source: (Moffett, 2005) The strategy that Porsche followed for both Cayenne and Boxster was a combination of outsourcing, licensing and in sourcing to influence the investment of the shareholder. Due to this strategy of the company, they enjoyed high return on the invested capital (ROIC), as the increasing sales of the product line shows in Figure 2....
14 pages (3514 words) Assignment
Got a tricky question? Receive an answer from students like you! Try us!