what is the process of accounting. and explain briefly about American accounting standards.
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Accounting process begins with the origin and identification of business transactions and is followed by recording , classifying , and summarizing of business transactions culminating in preparation of trail balance and financial statements , i.e profit and loss account and Balance Sheet.
Process of Accounting -
Identification > Recording of Financial Transactions > Classifying > Summarizing > Interpretation of the result and Communicating the results to the users.
American Accounting Standards i.e. GAAP
has two assumptions that is
1. Business Entity - The business is separate from its owners and other businesses. Revenue and expense should be kept separate from personal Expense.
2.Monetary Units - A stable currency should be used to record business transactions.
GAAP has the following Principles-
1.Historical Cost Concept
2. Matching Principle
3. Principle of Full Disclosure
4. Revenue Recognition Principle.
Process of Accounting -
Identification > Recording of Financial Transactions > Classifying > Summarizing > Interpretation of the result and Communicating the results to the users.
American Accounting Standards i.e. GAAP
has two assumptions that is
1. Business Entity - The business is separate from its owners and other businesses. Revenue and expense should be kept separate from personal Expense.
2.Monetary Units - A stable currency should be used to record business transactions.
GAAP has the following Principles-
1.Historical Cost Concept
2. Matching Principle
3. Principle of Full Disclosure
4. Revenue Recognition Principle.
Anonymous:
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