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Title: Accounting Principles
Description: Accounting Principles refer to a set of fundamental guidelines and concepts that serve as the foundation for recording, analyzing, and reporting financial transactions of a business or organization. These principles ensure consistency, accuracy, and transparency in financial reporting, allowing stakeholders to understand the financial health and performance of the entity. Key aspects of Accounting Principles include: 1. **Accrual Basis**: The accrual basis of accounting recognizes revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid. This principle provides a more accurate representation of a company's financial position and performance over a specific period. 2. **Consistency**: Consistency in accounting ensures that the same accounting methods and principles are applied consistently from one period to another. This promotes comparability of financial information over time, enabling stakeholders to make meaningful comparisons. 3. **Materiality**: Materiality requires accountants to focus on the relevance of financial information. Transactions and items are considered material if their omission or misstatement could influence the decision-making process of users. 4. **Prudence (Conservatism)**: The principle of prudence advises accountants to exercise caution when reporting financial information. It suggests that potential losses should be recognized immediately, while potential gains should only be recognized when they are realized. 5. **Going Concern**: The going concern principle assumes that a business will continue to operate indefinitely, allowing the entity to value its assets and liabilities accordingly. 6. **Entity Concept**: The entity concept separates the financial affairs of a business from those of its owners. It treats the business as an independent entity, distinct from its owners or other businesses. 7. **Cost Principle**: The cost principle requires assets to be recorded at their historical cost, not their current market value. This principle ensures that financial information is objective and verifiable. 8. **Conservatism**: Conservatism encourages accountants to be cautious and prudent in reporting uncertainties and potential losses. It aims to avoid overstating assets or income. 9. **Full Disclosure**: The full disclosure principle requires businesses to disclose all relevant and material information in their financial statements and accompanying notes. This provides users with a complete picture of the entity's financial situation. 10. **Matching Principle**: The matching principle requires expenses to be recorded in the same accounting period as the related revenues they helped generate. This principle ensures that financial statements reflect the true profitability of the business. Accounting Principles are established by accounting standard-setting bodies, such as the Financial Accounting Standards Board (FASB) in the United States or the International Accounting Standards Board (IASB) globally. Adhering to these principles ensures that financial statements are prepared in a consistent and reliable manner, promoting trust and confidence among investors, creditors, regulators, and other stakeholders in assessing a company's financial performance and position.
Description: Accounting Principles refer to a set of fundamental guidelines and concepts that serve as the foundation for recording, analyzing, and reporting financial transactions of a business or organization. These principles ensure consistency, accuracy, and transparency in financial reporting, allowing stakeholders to understand the financial health and performance of the entity. Key aspects of Accounting Principles include: 1. **Accrual Basis**: The accrual basis of accounting recognizes revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid. This principle provides a more accurate representation of a company's financial position and performance over a specific period. 2. **Consistency**: Consistency in accounting ensures that the same accounting methods and principles are applied consistently from one period to another. This promotes comparability of financial information over time, enabling stakeholders to make meaningful comparisons. 3. **Materiality**: Materiality requires accountants to focus on the relevance of financial information. Transactions and items are considered material if their omission or misstatement could influence the decision-making process of users. 4. **Prudence (Conservatism)**: The principle of prudence advises accountants to exercise caution when reporting financial information. It suggests that potential losses should be recognized immediately, while potential gains should only be recognized when they are realized. 5. **Going Concern**: The going concern principle assumes that a business will continue to operate indefinitely, allowing the entity to value its assets and liabilities accordingly. 6. **Entity Concept**: The entity concept separates the financial affairs of a business from those of its owners. It treats the business as an independent entity, distinct from its owners or other businesses. 7. **Cost Principle**: The cost principle requires assets to be recorded at their historical cost, not their current market value. This principle ensures that financial information is objective and verifiable. 8. **Conservatism**: Conservatism encourages accountants to be cautious and prudent in reporting uncertainties and potential losses. It aims to avoid overstating assets or income. 9. **Full Disclosure**: The full disclosure principle requires businesses to disclose all relevant and material information in their financial statements and accompanying notes. This provides users with a complete picture of the entity's financial situation. 10. **Matching Principle**: The matching principle requires expenses to be recorded in the same accounting period as the related revenues they helped generate. This principle ensures that financial statements reflect the true profitability of the business. Accounting Principles are established by accounting standard-setting bodies, such as the Financial Accounting Standards Board (FASB) in the United States or the International Accounting Standards Board (IASB) globally. Adhering to these principles ensures that financial statements are prepared in a consistent and reliable manner, promoting trust and confidence among investors, creditors, regulators, and other stakeholders in assessing a company's financial performance and position.
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Subject: Business Notes on Accounting Principles
These Business Study Notes explain:
Accounting Principles and show examples of computations used in various accounting
principles
...
2
Increased Sales
...
4
Convenience
...
5
Disputes
...
6
ComplicatesRecordKeeping
...
7
2
...
8
Units-of-Activity Depreciation
...
9
References
...
To do this, the analysis of the final
invoice is made
...
The current proportion is used to determine the capacity of
the company to pay its short-term obligations
...
Healthy liquidity ratios are greater than 1
...
It is calculated
by this formula: current ratio = current capacity ÷ current liabilities
Another calculation that can be executed is the calculation of operating capital
...
A positive
result means that the company has an excess of energy assets to meet the daily effort in the
operation of the business
...
The formula is illustrated as follows,
Current Assets – Current Liabilities Working Capital = Working Capital
Apart from liquidity ratios, activity relationships can be carried out
...
Activity rates measure the efficiency of the administration in the use of assets in its balance
sheet for sales and cash production
...
The formula is as follows:
Inventory conversion = costs for the sale of goods
...
Substituted
...
On
the other hand, the turnover of days in the inventory measures the average number of days that
you receive for the company to transform your inventory into the sale, or how many days you
need for the company to convert your resources into cash flows
...
A ratio
of healthy sales and days of inventory and sale of days in inventory means that the entity is able
to produce cash from its resources, therefore liquid enough to extend a loan
...
Another way Natalie can use as an option to giving Curtis a loan is by asking him to use a
credit card instead
...
If Curtis doesn't have a credit
card, he can ask you to borrow money from the bank
...
If the above means are not feasible, the
last resort for Natalie is to wait 30 days as Curtis's proposed terms are n / 30 and she may already
be able to purchase the blender for cash for that day
...
Is there any place that he has ever purchased goods on credit terms? If so you can get the
contact and ten ask for his character from the lender
...
Has any vender sent any filed or a letter of a filed legal action against you?
3
...
Why don’t you take a loan from the bank and settle the bill to buy the mixer?
5
...
One of the
advancements is credit card payment
...
As a method of payment it has both its advantages and disadvantages
...
This
is basically because the acceptance of credit cards does widen the base of our businesses
...
Accepting credit cards also breaks down the geographic barriers of doing business because a
business can potentially accept a credit card payment from anyone, anywhere in the world at any
time
...
2020)
...
Convenience
Customers can buy what they want now rather than having to wait, so accepting credit cards adds
a level of convenience for the customer
...
Credit cards allow customers instant gratification because they can buy
now and worry about paying for it later
...
2017)
...
Disputes
When customers dispute charges, this can cost the business money as well
...
In addition, when a customer disputes a charge, the credit card company can
charge you an additional fee, which is a chargeback fee
...
Fraud
Fraud is a problem that accompanies credit card acceptance
...
According
to fraud related practices, it tends to be the credit card company that picks up the cost when
fraudulent charges are made to a credit card
...
These include:
Fee for processing
Costs of sipping
Fee charge back
Furthermore, as a seller one can be at a loss for the product or service because they are not likely
to receive the product back from a fraudulent purchase
...
When an identity thief steals credit card information and uses it to
make purchases from your business, you can find yourself out of the product or service you sold
and the money fraudulently charged to the card for the purchase
...
It may
end up bringing about confusion
...
The cost of painting as well as the shelves for the delivery van
are included in the purchase price
...
The costs do not automatically mean the
purchase price in the transaction
...
The direct cost of moving the asset to the location and conditional state necessary for its use in
the form provided by management; and the initial estimate of the dismantling, removal, removal
and restoration costs of the site
...
Straight-line Depreciation
Year
Depreciable
Depreciation
Depreciation
Accumulated Net Book
Cost
Rate
Expense
Depreciation
Value
2020
$33,000
20% x 4/12
$2,200
$2,200
$38,300
2021
$33,000
20%
$6,600
$8,800
$31,700
2022
$33,000
20%
$6,600
$15,400
$25,100
Depreciable cost = Cost of the PPE – Residual Value
= $40,500 - $7,500
Depreciable cost = $33,000
Depreciation Rate = 1 ÷ useful life
=1÷5
Depreciation Rate = 0
...
of
Book
Rate
Expense
Year)
Depreciation
Value
2020
$40,500
40%
$5,400
$5,400 $35,100
2021
$35,100
40%
$14,040
$19,440 $21,060
2022
$21,060
40%
$8,424
$27,864 $12,636
Depreciation rate = 2 ÷ Life
=2÷5
Depreciation rate = 0
...
165
$2,475
$2,475 $38,025
2021
45,000
$0
...
165
$8,250
$18,150 $22,350
Depreciation Cost/Unit = Depreciable Cost ÷ Estimated total miles of travel
= $33,000 ÷ 200,000
Depreciation Cost/Unit = $0
...
During a
decline of $ 5,400 and a decline of $ 2,475 in relation to assets and equity, using the double
acceptance and unitary method will occur
...
Effect on Cookie Creations’ Income Statement at December 31, 2021:
DoubleStraight-line
declining
Depreciation
Balance
Units-ofActivity
Depreciation
Depreciation
Depreciation Expense
$2,200
$5,400
$2,475
Among the three methods, the double cover methods leads to report to the slightest return
...
The effects on the income statement depend on the date of the annual depreciation
The units of the activity depreciation method are better adapted to evaluate the van
...
Although depreciation of the straight line leads to a larger amount of net result indicated
between the three methods, this does not lead to a more accurate measure
...
References
Jones, M
...
, Viswanath, O
...
, Kaye, A
...
, Gill, J
...
, &Simopoulos, T
...
(2018)
...
Pain and therapy, 7(1), 1321
...
, Zhu, X
...
, Zhang, X
...
, Wang, Z
...
(2018)
...
Advanced Materials, 30(35), 1801418
Title: Accounting Principles
Description: Accounting Principles refer to a set of fundamental guidelines and concepts that serve as the foundation for recording, analyzing, and reporting financial transactions of a business or organization. These principles ensure consistency, accuracy, and transparency in financial reporting, allowing stakeholders to understand the financial health and performance of the entity. Key aspects of Accounting Principles include: 1. **Accrual Basis**: The accrual basis of accounting recognizes revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid. This principle provides a more accurate representation of a company's financial position and performance over a specific period. 2. **Consistency**: Consistency in accounting ensures that the same accounting methods and principles are applied consistently from one period to another. This promotes comparability of financial information over time, enabling stakeholders to make meaningful comparisons. 3. **Materiality**: Materiality requires accountants to focus on the relevance of financial information. Transactions and items are considered material if their omission or misstatement could influence the decision-making process of users. 4. **Prudence (Conservatism)**: The principle of prudence advises accountants to exercise caution when reporting financial information. It suggests that potential losses should be recognized immediately, while potential gains should only be recognized when they are realized. 5. **Going Concern**: The going concern principle assumes that a business will continue to operate indefinitely, allowing the entity to value its assets and liabilities accordingly. 6. **Entity Concept**: The entity concept separates the financial affairs of a business from those of its owners. It treats the business as an independent entity, distinct from its owners or other businesses. 7. **Cost Principle**: The cost principle requires assets to be recorded at their historical cost, not their current market value. This principle ensures that financial information is objective and verifiable. 8. **Conservatism**: Conservatism encourages accountants to be cautious and prudent in reporting uncertainties and potential losses. It aims to avoid overstating assets or income. 9. **Full Disclosure**: The full disclosure principle requires businesses to disclose all relevant and material information in their financial statements and accompanying notes. This provides users with a complete picture of the entity's financial situation. 10. **Matching Principle**: The matching principle requires expenses to be recorded in the same accounting period as the related revenues they helped generate. This principle ensures that financial statements reflect the true profitability of the business. Accounting Principles are established by accounting standard-setting bodies, such as the Financial Accounting Standards Board (FASB) in the United States or the International Accounting Standards Board (IASB) globally. Adhering to these principles ensures that financial statements are prepared in a consistent and reliable manner, promoting trust and confidence among investors, creditors, regulators, and other stakeholders in assessing a company's financial performance and position.
Description: Accounting Principles refer to a set of fundamental guidelines and concepts that serve as the foundation for recording, analyzing, and reporting financial transactions of a business or organization. These principles ensure consistency, accuracy, and transparency in financial reporting, allowing stakeholders to understand the financial health and performance of the entity. Key aspects of Accounting Principles include: 1. **Accrual Basis**: The accrual basis of accounting recognizes revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid. This principle provides a more accurate representation of a company's financial position and performance over a specific period. 2. **Consistency**: Consistency in accounting ensures that the same accounting methods and principles are applied consistently from one period to another. This promotes comparability of financial information over time, enabling stakeholders to make meaningful comparisons. 3. **Materiality**: Materiality requires accountants to focus on the relevance of financial information. Transactions and items are considered material if their omission or misstatement could influence the decision-making process of users. 4. **Prudence (Conservatism)**: The principle of prudence advises accountants to exercise caution when reporting financial information. It suggests that potential losses should be recognized immediately, while potential gains should only be recognized when they are realized. 5. **Going Concern**: The going concern principle assumes that a business will continue to operate indefinitely, allowing the entity to value its assets and liabilities accordingly. 6. **Entity Concept**: The entity concept separates the financial affairs of a business from those of its owners. It treats the business as an independent entity, distinct from its owners or other businesses. 7. **Cost Principle**: The cost principle requires assets to be recorded at their historical cost, not their current market value. This principle ensures that financial information is objective and verifiable. 8. **Conservatism**: Conservatism encourages accountants to be cautious and prudent in reporting uncertainties and potential losses. It aims to avoid overstating assets or income. 9. **Full Disclosure**: The full disclosure principle requires businesses to disclose all relevant and material information in their financial statements and accompanying notes. This provides users with a complete picture of the entity's financial situation. 10. **Matching Principle**: The matching principle requires expenses to be recorded in the same accounting period as the related revenues they helped generate. This principle ensures that financial statements reflect the true profitability of the business. Accounting Principles are established by accounting standard-setting bodies, such as the Financial Accounting Standards Board (FASB) in the United States or the International Accounting Standards Board (IASB) globally. Adhering to these principles ensures that financial statements are prepared in a consistent and reliable manner, promoting trust and confidence among investors, creditors, regulators, and other stakeholders in assessing a company's financial performance and position.