We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

The methods and principles of accounting - Essay Example

Comments (0)
Accounting in general is considered to be a method which helps in recording the financial transactions of the organization that took place in the past. The accounts of a company usually look into the past and reveal the financial decisions and their results which were already taken by the organization…
Download full paper

Extract of sample
The methods and principles of accounting

Download file to see previous pages... Rules and principles of accounting are basically designed in such a way that they provide certain standardized frameworks which help in the assessment of the financial position of a firm or a government. Hence there may always be a difference from one country to another in the accounting practices that are followed.
There can be a major influence of the accounting consequences of different kinds of available options with which the decision makers are faced with, on the final decision taken. Thereby, the choice between the different methods of accounting may not limit themselves to just the portrayal of results; they may also play a vital role in the actual shaping of future decisions including the organization's financial structuring, functioning and activities.
Accounting is best known as the language of business and communicates the results of the business. As the accepted Lingua Franca in addition to being the medium of communication it also satisfies the role of understanding the existing as well as potential additions to the available literature. As with every credible language, Accountancy also has its own rules and syntax which comprises the principles on which the system is based, known as the Generally Accepted Principles (GAAP), International Accounting Standards, and US GAAP etc. forming the theoretical base of Accountancy, and the Double Entry bookkeeping for recording the transactions providing the Practical Base of the system.
To communicate the necessary, vital and relevant information, the requirements of the prospective users are identified and a systematic process is adhered to resulting in the formation of "Financial Statements." They are primarily the Income Statement and the Position Statement which are popular as "Trading and Profit & Loss Account" and the "Balance Sheet" respectively.
The Balance Sheet shows the financial status of a business at a given point of time. That is the reason, the heading of Balance Sheet reads as "Balance Sheet of Xxx Company as on 31st March, 20xx." The balance sheet shows the amount of funds the owner has in the business. To determine this amount, the assets owned are listed and a value is placed on them. Liabilities and their values also are listed. The difference between assets and liabilities is equal to the net worth, or the owner's equity in the business (Klinefelter, 2000).
The income statement on the other hand reflects the performance of the entry over a period of time and hence it is headed as "Income Statement of Xxx Company for the year ended 31st March, 20xx."
The major purposes of financial reporting are:
Providing information which in turn becomes the basis for exercising decisions and actions by the potential users,
Reflect the financial progress and present health of the business,
Aid in the formulation of policies and procedures for the smooth and efficient conduct of the business,
Enable the management to discharge their obligations and stewardship functions effectively
Financial Reporting
The end-users of financial statements need not necessarily be those of finance background. They might not be in a position to understand the complex technicalities of financial statement. People who do not have detailed understanding of the financial ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
Principles of accounting
In brief, ABC refers to a costing system used in assigning costs to various goods and services in the business world (Grossman & Livingstone, 2009). In this paper, Super Bakery Inc. acts as a practical demonstration of how the system can determine the costs in a real life situation.
2 Pages(500 words)Research Paper
Accounting principles utilized in UAE
One cannot ignore the fact that numerous factors such as social, economic and legal differences account for different standards that are vary across nations. However, there is a strong push towards a uniformed system of accounting methods in order to facilitate transactions and comparability of financial statement.
3 Pages(750 words)Essay
Accounting methods
In the view of Turgeon, Rabinowitz, and Wong (2008), IFRS conversion causes a change in book and tax accounting methods which will have a direct effect on the company’s income tax reporting, cash taxes payable, and tax compliance.
3 Pages(750 words)Research Paper
Accepted Accounting Principles related to Health Care
The motive of financial accounting is to provide financial information, generally historic in nature, to both internal and external users including owners, lenders, suppliers, employees and to the government and other insurers. In the field of accounting there are Generally Accepted Accounting Principles or GAAP that set the rules for financial statements.
3 Pages(750 words)Essay
Generally accepted accounting principles relating to health care
It has been observed that the adherence to the standards of GAAP provide a considerable level of comparability amidst different local governments and state units (Office of Financial Management, 2012). GAAP can be identified as an international principle that governs effective and appropriate accounting elements within a specific organization.
3 Pages(750 words)Essay
Financial Accounting principles
It is a common experience for all of us that money must be spent carefully. If a person is careless in spending money, a day will come when he will be left with no money. Same holds true for a business firm or for a country as a whole. So as students we must try to understand the importance of maintaining accounts keeping international standards in mind.
7 Pages(1750 words)Essay
Accounting Principles and Ethics
When it comes to preparing, presenting, and reporting a financial statement, it is necessary for accountants to follow the generally accepted accounting principles in the United States (US
3 Pages(750 words)Essay
Accepted Accounting Principles related to Health Care
These rules were established by the Financial Accounting Standards Board. The first principle is the entity concept which is the group or organization such as a hospital, medical school, or nursing
3 Pages(750 words)Essay
Accounting Principles
Each of the business entities keeps principles of accounting in three ways; accounting, book keeping and auditing and all these are the basic principles lie
4 Pages(1000 words)Essay
Generally Accepted Accounting Principles
The conformance to the International Financial Reporting Standards, rules and conventions under GAAP leads to recording, summarization and reporting of financial statements that are comparable in international
2 Pages(500 words)Essay
Let us find you another Essay on topic The methods and principles of accounting for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us