Commercial Accounting and (Gaap)
Commercial Accounting and Generally Accepted Accounting Principles
Dan Markwell
ACC/290
12/18/12
Anita Renee’ Johnson
Commercial Accounting and Generally Accepted Accounting Principles
Commercial accounting is an accurate account of business transactions, it can only be acquired if both cash and credit transactions are performed, recorded, and recognized in such a way that there can be no duplication and the transactions are recorded under commercial accounting. The system known as double entry book keeping or the commercial accounting system that records both aspects of transactions, also it records credit transactions in cash accounting the day of the receipt. The single entry in accounting for example: there is a sale, where the transaction is complete after the exchange of cash for goods. In commercial accounting the date in which the transaction was made needs to be recorded regardless to whether it was paid or it wasn’t. Generally Accepted Accounting Principles better known as (GAAP) is the collection of standards and practices that are required to be used by business’s to record and present the results of their financial activities and their records of what they owe, established by the Financial Accounting Standards Board (FASB). These accounting principles are standardized and used for the many private and publicly traded companies in America today. Every economic event within business must be associated with and recorded by a specific entity and business records must not include the personal assets or liabilities of the owner. If an idea holds no impact on a decision maker, investors, or creditors, then the relating (GAAP) principles do not have to be followed. (GAAP) requires the use of accrual basis accounting rather than cash basis accounting, this is imposed on businesses so that investors have a minimum level of consistency in the financial statements they use when analyzing businesses for investment purposes.
Dan Markwell
ACC/290
12/18/12
Anita Renee’ Johnson
Commercial Accounting and Generally Accepted Accounting Principles
Commercial accounting is an accurate account of business transactions, it can only be acquired if both cash and credit transactions are performed, recorded, and recognized in such a way that there can be no duplication and the transactions are recorded under commercial accounting. The system known as double entry book keeping or the commercial accounting system that records both aspects of transactions, also it records credit transactions in cash accounting the day of the receipt. The single entry in accounting for example: there is a sale, where the transaction is complete after the exchange of cash for goods. In commercial accounting the date in which the transaction was made needs to be recorded regardless to whether it was paid or it wasn’t. Generally Accepted Accounting Principles better known as (GAAP) is the collection of standards and practices that are required to be used by business’s to record and present the results of their financial activities and their records of what they owe, established by the Financial Accounting Standards Board (FASB). These accounting principles are standardized and used for the many private and publicly traded companies in America today. Every economic event within business must be associated with and recorded by a specific entity and business records must not include the personal assets or liabilities of the owner. If an idea holds no impact on a decision maker, investors, or creditors, then the relating (GAAP) principles do not have to be followed. (GAAP) requires the use of accrual basis accounting rather than cash basis accounting, this is imposed on businesses so that investors have a minimum level of consistency in the financial statements they use when analyzing businesses for investment purposes.
References: (Investopedia.com) (Wiley PLUS)