Part I. A. Generally Accepted Accounting Principles. GAAP is not a fixed set of rules. It is a guideline or more precisely a group of objectives and concepts that have evolved over 500 years from the basic concepts of Luca Pacioli set forth in the 1400s. It governs how financial statements are prepared and presented in the United States. The Financial Accounting Standards Boards (FASB)‚ the American Institute of Certified Public Accountants and the Securities and Exchange Commission (SEC)
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“Generally Accepted Accounting Principles (GAAP) is the methods‚ rules‚ practices and other procedures that have evolved to govern the preparation of financial statements” Justify the statement with suitable examples. Accounting is the language of business and it is used to communicate financial information. In order for that information to make sense‚ accounting is based on some fundamental concepts. Transactions are recorded in accounts‚ following certain fundamentals concepts and conventions
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the balance sheet I did) In going over the numbers‚ she remarked‚ "it’s sort of surprising that cash increased by $31677‚ but net income was only $19635. Why was that? Her friend replied‚ "A partial answer to that question is to look at an income statement for June. I think I can find the data I need to prepare one for you." In addition to the data given in the case‚ her friend found a record of cash reciepts and disbursements‚ which is summarized in Exhibit 1. She also learned that all accounts
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Generally Accepted Accounting Principles Stephanie R. Stewart HCS/571 September 24‚ 2012 Anne Harney Finlon Generally Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP) are important ideas to understand when discussing finances of any kind. It is important for all nurses‚ especially those in management roles‚ to understand financial concepts and be involved in the budgetary process. This paper will help to create an understanding of GAAP‚ the purpose of the principles
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set of accounting criteria used to develop medical centers financial statements are known as generally accepted accounting principles (GAAP). GAAP are a mixture of respected criteria created by Securities and Exchange Commission (SEC) and accountants. The SEC has authority granted by The Securities Act of 1933 and the Securities Exchange Act of 1934‚ to determine reporting and disclosure requirements. Oversight is the general functions of the SEC‚ granting the Governmental Accounting Standards
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Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31‚ 2012‚ the carrying value of the building was $30 million and its tax basis was $20 million. At December 31‚ 2013‚ the carrying value of the building was $28 million and its tax basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2013 was $45 million.On January 1‚ 2010
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accordance with generally accepted accounting principles? Goodwill is recorded in the accounts only under the circumstances that is is acquired through a purchase of another business or combination of businesses. According to Generally Accepted Accounting Principle under these circumstances where goodwill is acquired through a purchase by another business that it is recognized as having indefinite life and should not be amortized but should be tested for impairment on at least an annual basis. Chapter
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5. In accrual-basis of accounting‚ revenues are recorded when a service is performed. 6. Current liabilities are expected to be paid off or eliminated in the next 12 months. [pic] 7. Each time a business records revenue the account Cash is increased. 8. Accumulated depreciation of an asset – its depreciation expense = book value. 9. Financial accounting provides information for people inside the company while managerial accounting focuses on information
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4. Contributed capital 5. Retained earnings Cash received 1. DTE is wrong 2. Capex 3. Defrev 4. Contributed capital 5. Retained earnings Cash received 1. DTE is wrong 2. Capex 3. Defrev 4. Contributed capital 5. Retained earnings Cash received 1. DTE is wrong 2. Capex 3. Defrev 4. Contributed capital 5. Retained earnings Cash received 1. DTE is wrong 2. Capex 3. Defrev 4. Contributed capital 5. Retained earnings Cash received 1. DTE is wrong 2. Capex 3. Defrev
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accrual-basis accounting and cash-basis accounting? The variation between accrual basis accounting and cash basis accounting‚ is how cash is documented. Cash basis is an accounting basis that is used when expenses and revenue are paid out or received. This is when the transaction will be recorded. In accrual-basis accounting‚ transactions are recorded when they actually happen. Payment does not need to be made for the transaction to be recognized in accrual-basis accounting unlike cash-basis. Both
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