1. (a) What are generally accepted accounting principles (GAAP)? In the U.S., generally accepted accounting principles, commonly abbreviated as US GAAP or simply GAAP, are accounting rules used to prepare, present, and report financial statements for a wide variety of entities, including publicly-traded and privately-held companies, non-profit organizations. (b)What bodies provide authoritative support for GAAP? The bodies that provide authoritative support for GAAP are the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB).
2. What elements comprise the FASB’s conceptual framework? Elements
Assets, Liabilities, and Equity
Investments by owners
Distribution to owner’s
Revenues and Expenses
Gains and Losses
1. Mingenback Company has the following internal control procedures over cash disbursements. Identify the internal control principle that is applicable to each procedure. 1. Company checks are prenumbered. 2. The bank statement is reconciled monthly by an internal auditor. 3. Blank checks are stored in a safe in the treasurer’s office. 4. Only the treasurer or assistant treasurer may sign checks. 5. Check signers are not allowed to record cash disbursement transactions. 1. Physical, mechanical, and electronic controls. 2. Other controls. 3. Independent internal verification .4.Segregation of duties. 5. Establishment of responsibility.
Condensed Balance Sheet
Increase or (Decrease)
2009 2008 Amount Percentage Assists
Current Assets $125,000 $100,000 $25,000 25.0% Plant assets (net)...