Purchase Solution

Source of GAAP, accrual basis, firm structures

Not what you're looking for?

Ask Custom Question

-Topic 1: Identify and describe the sources of generally accepted accounting principles. Identify source hierarchy and explain why the hierarchy is important.
-Topic 2: Describe effective accounting information using the qualities of accounting information from your readings this week.
-Topic 3: Describe how an accrual based accounting system is different from a cash basis of accounting.
-Topic 4: Describe the types of business structures and the defining features of each structure

Purchase this Solution
Solution Summary

Your tutorial is 724 words plus four references.

Solution Preview

Topic 1

As of 2009, US GAAP has only one source, the FASB codification. See quote from the FASB codification site:

"The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities. The Codification is effective for interim and annual periods ending after September 15, 2009. All previous level (a)-(d) US GAAP standards issued by a standard setter are superseded. Level (a)-(d) US GAAP refers to the previous accounting hierarchy. All other accounting literature not included in the Codification will be considered nonauthoritative. See Codification Topic 105, Generally Accepted Accounting Principles, for additional details.

The Codification is the result of a major 5-year project involving more than 200 people from multiple entities. The Codification structure is significantly different from the structure of previous standards. This Notice to Constituents provides information that will help in obtaining a good understanding of the Codification structure, content, style, and history."

https://asc.fasb.org/imageRoot/65/21914065.pdf

So, while prior to this there was a "house of GAAP" ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Motivation

This tests some key elements of major motivation theories.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

View More Free Quizzes
Related BrainMass Solutions

  • Types of Business Structures and Features

    Identify source hierarchy and explain why the hierarchy is important. 2. Describe the qualities of accounting information. 3. Compare and contrast accrual and cash bases of accounting. 4.

  • Sources of GAAP

    The solution differentiates accrual based accounting from a cash basis system of accounting; and, it also provides information about the different types of business structures (that is, sole proprietorships, partnerships, limited liability companies and

  • Accounting concepts and business structures memo

    If your friend wants his company's shares to be traded on the stock exchange then Securities and Exchange Commission required that GAAP be followed. o He has also been told that he needs an accrual basis accounting system.

  • Cash and Accrual Accounting

    116079 Cash and accrual accounting What is the difference between cash and accrual accounting? Which basis of accounting do most companies use, cash or accrual? Why? Which method is approved by GAAP? Why? Which method does the IRS prefer?

  • GAAP: Adjusting of Accounts, and Accrual vs Cash Basis

    GAAP with respect to adjusting the accounts: GAAP stresses that the books of accounts should be prepared on the basis of accrual basis of accounting and not on the cash basis of accounting.

  • Why is modified accrual accounting necessary?

    274460 Modified Accrual Accounting Why is modified accrual accounting necessary? Modified accrual is a method of accounting often used in tax reporting. It is not GAAP and would therefore require noting in the opinion of a financial statement.

  • Governmental Accounting Standards

    What are the objectives of the GASB and the FASB. What are their similarities and what are their differences. And how do the modified accrual basis of accounting differe from full accrual accounting.

  • Which basis of accounting do most companies use, cash or acc

    373760 Which basis of accounting do most companies use, cash or accrual? Is it GAAP? Which basis of accounting do most companies use, cash or accrual? Why? Which method is approved by GAAP? Why? What are the positives and negatives of each?

  • Quick and Current Liquidity Ratios, DuPont Ratio, Profit Margin, Asset Utilization and Financial Leverage for GE.

    According to the accounting standards of FASB and IASC the financial statement can be prepared on the basis of cash and accrual basis accounting method.

View More Related Solutions