Generally Accepted Accounting Principles Homework Help
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What are Generally Accepted Accounting Principles?
Also abbreviated as GAAP, Generally Accepted Accounting Principles are the set of protocols and accounting principles that a firm or company is supposed to follow while preparing their financial statements. Set by policy boards it also acts as authority standards and widely common way to record accounting information. In this Generally Accepted Accounting Principles homework help article we discuss the important aspects of GAAP.
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Seven major Generally Accepted Accounting Principles
Our Generally Accepted Accounting Principles homework help team has compiled the following 10 widely established protocols for making financial statements.
1. The business is a single entity concept: a business is separate from its owner in the eyes of the law. Even after the existence of its owners, a business can exist and prosper.
2. The specific currency principle: the companies who have the impact of their business in other countries should convert the currencies in financial statement to the country’s currency. The exchange rates should be clearly specified as per Generally Accepted Accounting Principles homework help article.
3. The specific time period principle: standard dates for the initiation and end of the financial period should be shown clearly in the financial statements.
4. The historical cost principle: the historical cost determines the value of the item at which it was purchased and sold.
5. The full disclosure principle: every aspect of a company’s financial statements is to be shown on paper to avoid any frauds.
6. The recognition principle: the incomes and expenses of a company at the time of their occurrence should be shown in the financial statements to avoid any doubts.
7. The matching principle: the accrual system of accounting is followed according to it and as we mentioned earlier in our Generally Accepted Accounting Principles homework help article, the debit and credit should equalize themselves.
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