Free essays on basic accounting concepts and business structure for students use our papers to help you with yours 1 - 30. Explaining basic accounting concepts and business structures student name ac/537 date instructor explaining basic accounting concepts and business structures it was not long ago where financial reporting of some companies felt like the famous quote from the movie forrest gum, life is like a box of chocolates you never know whatnot are going to get. The unit-of-measure assumption assumes that a business's domestic currency is the appropriate unit of measure for the business to use in its accounting in other words, the unit-of-measure assumption states that it's okay for us businesses to use us dollars in their accounting. This article is excerpted from business structures, by michael spadaccini the most common forms of business enterprises in use in the united states are the sole proprietorship, general.
Department business administrators have a responsibility for identifying and resolving financial problems one of the most important internal controls in a business setting is to reconcile a department's records to source documentation ensuring revenues and expenses that have been recorded are legitimate. Our goal is to help you understand the basic concepts of accounting and how they relate to your business one of the great things about accountedge is that it does all the debits and. During the lifetime of an entity, accountants produce financial statements at arbitrary points in time in accordance with which basic accounting concept periodicity assumption what accounting concept justifies the usage of depreciation and amortization policies. Basic financial principles lesson accounting is the language of business and it is used to communicate financial information in order for that information to make sense, accounting is based on 12 fundamental concepts.
Objectives and general practices of fund accountancy the overarching objectives of fund accounting for nonprofits and government agencies differ in many respects from those used in the for-profit world of business. Explain the effect of accounting concepts, how such concepts provide guidance in determining when an item of income should be included in gross income, and when an expense item is deductible. A constructive way to summarize basic accounting concepts and business structures is to start by making an outline that includes specific concepts and then describe them in simple terms.
Explaining basic accounting concepts and business structures there are many important aspects of accounting the generally accepted accounting principles are accounting rules set out for companies to follow to ensure all companies are on the same page business wise qualities of accounting are. The profits/losses of the business during the accounting period, balance sheet, which is a statement of assets and liabilities of the business at a point of time, is also proposed by all accountants. Basic strategy concepts learning objectives after reading and studying this chapter, you should be able to: • explain the difference between the strategic initiatives and operating.
The accounting department exists to ensure that a business isn't losing unnecessary money, employees are being paid, obligations like taxes are correctly fulfilled, trends and patterns that effect the businesses profits and losses are being analyzed and inventory is being paid for. This feature is not available right now please try again later. [a] accounting is the language of business [b] transaction are recorded in quantitative terms only [c] accounting is the art of recording,classifying and summarizing. In accounting the term variance usually refers to the difference between an actual amount and a planned or budgeted amount for example, if a company's budget for repairs expense is $50,000 and the actual amount ends up being $45,000 or $63,000, there.
The basic accounting assumptions are like the pillars on which the structure of accounting is based business entity assumption according to this assumption, the business is treated as a unit or entity apart from its owners, creditors, managers, and others. Basic accounting concepts and business structures danny silvio acc/537 10/10/11 professor basic accounting concepts and business structures generally accepted accounting principles the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements are prepared by the. This explanation of accounting basics will introduce you to some basic accounting principles, accounting concepts, and accounting terminology once you become familiar with some of these terms and concepts, you will feel comfortable navigating through the explanations, quizzes, puzzles, and other features of accountingcoachcom.
Module - 1 basic accounting notes 17 accounting concepts accountancy in the previous lesson, you have studied the meaning and nature of business transactions and objectives of financial accounting. My goal is to help you understand accounting principles by breaking down accounting concepts into everyday language, so you can understand them and learn faster- for free myaccountingcoursecom also has many examples of basic accounting events and situations for you to study.
The accounting entity concept recognizes a specific business enterprise as one accounting entity, separate and distinct from the owners, managers, and employees of that business in other words, it means that a company has its own identity set apart from its owners or anyone else. Accounting or accountancy is the measurement, processing, and communication of financial information about economic entities such as businesses and corporationsthe modern field was established by the italian mathematician luca pacioli in 1494. Accounting basics: financial statements each is defined in statement of financial accounting concepts no 6, the structure of the owners' equity section depends on whether the entity is an. This is the concept that accounting transactions should be recorded in the accounting periods when they actually occur, rather than in the periods when there are cash flows associated with them this is the foundation of the accrual basis of accounting.