Accouting Principle I

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QS 1-1 Reading and interpreting accounting reports requires some knowledge of accounting technology. (a) Identify the meaning of these accounting-related acronyms: GAAP, SEC, FASB, IASB and IFRS. (b) Briefly explain the importance of knowledge base or organization that is referred to each of the accounting-related acronyms. * (a) The meaning of accounting-related acronyms GAAP, SEC, FASB, IASB and IFRS: * GAAP: Generally Accepted Accounting Principle.

* SEC: Securities and Exchange Commission.
* FASB: Financial Accounting Standards Board.
* IASB: International Accounting Standards Board.
* IFRS: International Financial Reporting Standards.
(b) The importance of knowledge base or organization that referred to for each accounting-related acronyms: * GAAP aims to make information in financial statements relevant, reliable, and comparable. * SEC is the government group that establishes reporting requirements for companies that issue stock to the public. * FASB is the private group that sets both broad and specific principles. * IASB is an independent group, issues IFRS that identify preferred accounting practice. * IFRS are considered a "principles based" set of standards in that they establish broad rules as well as dictating specific treatments. Source: Accounting Principle I textbook page 9

QS 1-2 An important responsibility of many accounting professionals is to design and implement internal control procedures for organizations. Explain the purpose of internal control procedures. Provide two examples of internal controls applied by companies. * Internal control is defined as a process affected by an organization's structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives. * Example 1: Internal control makes sure the company operations are efficient and consistent across the board....
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