Module 1 Notes.docx - ACCT 701 LSUS Module 1 Chapters 1 2 6...

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ACCT 701 - LSUSModule 1Chapters 1, 2, & 6Accounting is the language of business, turning financial activity into numbers. U.S. GAAP– General Accepted Accounting Principles – foundation of financial accounting for business entities in the United States. Principles, standards, and procedures that govern the preparation of financial statements-Economic Entity Assumption (Business Entity Concept) – ensure financial transactions made by the business is reported separately from transactions of the owners of the business-Cost Principle – all business transactions must initially be recorded at agreed upon cost, carry asset at cost-Objectivity Concept – all accounting records should be free of bias, objective, and verifiable-Monetary Unit Concept – all transactions must be expressed as a currency-Revenue Recognition Principle – determines when revenue is recorded, timing direct impact on company’s bottom line-Accounting Period Concept – transactions should be recorded in the period they occurred-Matching Principle – Expenses are recognized at the same pace as revenue that those expenses helped to generateFASB – Financial Accounting Standards Board – Organization that develops, establishes, and communicates standards of financial account and reporting in the U.S.SEC – Securities and Exchange Commission – regulates financial reporting and disclosures by public companies in the U.S. Publicly traded entities are required to submit their audited financial statements to SEC quarterly and annually.

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