Question

what is the process of accounting. and explain briefly about American accounting standards.

Answer 1

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.