Principles of Accounting Case Assignment 1

Principles of Accounting Case Assignment 1 - TUI UNIVERSITY...

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TUI UNIVERSITY Dean J. Keveles Module 1 Case Assignment ACC403 Principles of Accounting Dr. Eugene J. Nesbitt February 21, 2011
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Part I. In discussing and expanding on a set of accounting terms as concepts, we will look at Generally Accepted Accounting Principles (US GAAP), International Accounting Standards (IFRS), and Liquidity. First, looking at Generally Accepted Accounting Principles (US GAAP), these are a set of principle standards, set by the US Federal Accounting Standards Advisory Board (FASB), for in which financial statements are reported to investors, and for which potential investors can view the financial standings of a company. These financial statements are normally reported in annual and/or quarterly intervals. This is an attempt to create a set of standards within the US for reporting and force companies to be ethical and fair in their reporting. Investopedia defines Generally Accepted Accounting Principles as "the common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information" . But what is it designed for? It is important for these accounting principles to be imposed on companies so that investors have a some form of consistency in the financial statements they use when analyzing companies for investment purposes. Investopia goes so far as to recommend that ". If a financial statement is not prepared using GAAP principles, be very wary! That said, keep in mind that GAAP is only a set of standards. There is plenty of room within GAAP for unscrupulous accountants to distort figures. So, even when a company uses GAAP, you still need to scrutinize
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This note was uploaded on 10/10/2011 for the course FINANCE ACC403 taught by Professor Dr.eugenej.nesbitt during the Winter '11 term at Trident Technical College.

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Principles of Accounting Case Assignment 1 - TUI UNIVERSITY...

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