Archive for November, 2012
For the success of the organization and conduct of joint actions of its resources, people (labor), capital, opportunities (market), and management. For those outside of the organization to the success or failure of the organization do not say anything until it is measured and presented in the form of benefits. Thus, it is necessary to translate the effects of options, labor, management, etc., in some areas of accounting, which is a measure of financial performance, the success and profitability of the organization.
Therefore, allowance allows internal and external sources of information, capital, etc., as well as their management for the best profit for the company. Accounting provides information to investors and management and decision support. Thus, the process of financial accounting to follow accounting rules, standards and regulations.
The various individuals and businesses who use these accounts for its own purposes, the Financial Accounting Standards Board (FASB) has created a list of rules called accounting standards and generally accepted accounting principles (GAAP), all states should consider the financial account. They are:
The essence of the concept of a business and its owner (s) are treated as separate entities. The company is nothing more than a business entity with its own assets and liabilities. In addition, the person / organization that holds own funds (bank accounts, real estate and other assets), liabilities, etc., and both have an individual existence. Assets and liabilities of the holding are not considered equal assets and liabilities.
The concept of measuring money: if the transaction or agreement must be taken into account in the accounts must be expressed in terms of money, in U.S. dollars. If this is not possible, as this will not be considered for accounting purposes.
The concept of value: tangible assets (land, buildings, equipment, vehicles, etc.) and liabilities (for example, the obligation to investors, loans, etc.), which is owned by a company must be registered with the story or the original cost (cost at the time of purchase), regardless of the actual costs.
The principle of continuity: This is one of the basic concepts of accounting. In accordance with this concept, the device should be considered to stay in business, if there are no plans or intentions to liquidate the entity or to reduce any of its activities. This means that we assume that the company and its activities will continue for a very long time.
The concept of use: When you run the concept states that the company and its activities are considered functional, all plans proposed the elimination or reduction of the need for regular evaluations to assess the performance of the company. This is because you can not wait for a long time. This is the period during which measures the performance of the company, which is called the accounting and performance of the company and its operations is determined for each reporting period.
The concept of exercise: According to this concept should revenues and costs of the company, or to identify and observe how they have earned the company, regardless of when cash transactions for the payment or receipt of money for the same thing holds.
Game concept: the concept of Matching is used to calculate and understand the relationship between the profitability of the company. In this sense, the income earned in the fiscal year to be deducted from the loss, liability, etc., incurred to earn income.
The precautionary principle: This concept is also known as conservatism. Confirms that all costs and expenses incurred by the event should register with immediate effect. On the other hand, the income or profits that the company makes money by getting a real documentary. This is an important concept of accounting, as it ensures that there is no overstating assets / income or understating liabilities / expenses.
Revenue recognition concepts: the concept of considering the immediate recognition of income every time you sell a product or service. It provides that any income should be recognized immediately, even in the case of credit sales.