Generally Accepted Accounting Principles

Topics: Generally Accepted Accounting Principles, Balance sheet, Asset Pages: 3 (904 words) Published: April 17, 2013
Generally Accepted Accounting Principles

Kelly Voelm


March 25, 2013
Dr. Tricia Jenkins

Generally Accepted Accounting Principles

Companies and businesses are guided by rules and regulations that they must follow concerning financial data reporting. Generally accepted accounting principles (GAAP) assist accountants to work with the Securities and Exchange Commission (SEC) and are guidelines that apply to most financial statements. The GAAP are a list of principles used by accountants and they influence most financial information. These principles of accounting are ▪ Accounting Entity

▪ Money Measurement
▪ Duality
▪ Cost Valuation
▪ Stable Monetary Unit
Accounting Principles
The Accounting Entity is the organization that is the focus of the reports and information. These entities include businesses, churches, school districts, governments, and many other social organizations. For the purpose of this paper health care organizations will be the focus. Hospitals, clinics, physician offices, and other health care entities are required to file monetary reports showing monetary value of the organization. Money Measurement is a concept that relates to transactions that can only be recorded if they can be recorded in monetary terms. There are certain aspects of an organization that cannot be counted on the financial statement. The expertise of staff, reliability of services, and employee working conditions are aspects of the organization that cannot be added to a financial statement. Duality is the assets which are equal to the liabilities and the net assets. The assets, liabilities, and the net asset accounts should always create a balance ending in the duality. This means that the cash used to buy an asset is placed on the liability side of a financial statement and the purchased item is placed on the asset side of that statement. Cost Valuation is also known as historical or acquisition costs are...
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