Why is it permissible to violate generally accepted accounting principles when preparing reports used strictly by...
Why is it permissible to violate generally accepted accounting principles when preparing reports used strictly by company management?
Homework Answers
Generally Accepted Accounting Practices
(GAAP)
GAAP are the common set of accounting principles, standards and procedures that are used by accountants to prepare the financial statements. They are derived from practice, and on being useful get accepted into the accounting system. These principles are developed by the professional accounting bodies of different countries of the world, with the aim of attaining uniformity in accounting practiced by the entities of the respective countries.
Some cases unders which it is permissible to Violet GAAP
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Due to materiality principle of accounting an accountant may be allowed to disregard GAAP if the variance amount is insignificant.Professionals judgement is required in each situation to decide whether an amount is immaterial or not and what effect would it have on financial statement.
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On the basis of principle of conservatism if a situation involves two acceptable alternatives the accountant can choose that alternative which results in lesser net income without violating other provisions of GAAP.
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If violation of GAAP results in better presentation of financial statement then it doesn't account to violation of GAAP.
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Violation of GAAP is allowed if law set some different rules for the same situation.
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Why is it permissible to violate generally accepted accounting
principles when preparing reports used strictly by...
Violating GAAP Why is it permissible to violate generally accepted accounting principles when preparing reports used...
Violating GAAP Why is it permissible to violate generally accepted accounting principles when preparing reports used by company management?
Violating GAAP Why is it permissible to violate generally accepted accounting principles when preparing reports used...
Violating GAAP Why is it permissible to violate generally accepted accounting principles when preparing reports used by company management? give your own answer in a paragraph
earch forums . Chapter 15 - Generally Accepted Accounting Principles DB #5 Why is it permissible...
earch forums . Chapter 15 - Generally Accepted Accounting Principles DB #5 Why is it permissible to violate generally accepted accounting principles when preparing reports used strictly by management? Your response should be a minimum of 100 words. In your answer, explain and provide support as to why or why not it is acceptable and give an example for either argument. If you use an outside source in support of your answer, follow APA formatting for the reference. For this...
Assignment Questions: 1. One of the differences between Managerial Accounting and Financial Accounting is reporting flexibility....
Assignment Questions: 1. One of the differences between Managerial Accounting and Financial Accounting is reporting flexibility. Financial reporting is restricted by Generally Accepted Accounting Principles whereas reporting in Managerial Accounting has fewer rules. a) Why is it permissible to violate Generally Accepted Accounting Principles when preparing reports used strictly by company management? b) Should external users always have the same information as internal users? Explain. 2. The United States uses accounting standards developed by the Financial Accounting Standards Board (FASB)...
Why is it important to have an established system of accounting and Generally Accepted Accounting Principles...
Why is it important to have an established system of accounting and Generally Accepted Accounting Principles or rules that everyone must follow? (Answer this question in 1-2 brief, well-developed paragraph(s))
Fife Company prepares quarterly reports following generally accepted accounting principles. For each of the items below,...
Fife Company prepares quarterly reports following generally accepted accounting principles. For each of the items below, state whether the method is in conformity with generally accepted accounting principles with an explanation of your answer and appropriate justification: 1. Fife takes a physical inventory at year-end for annual financial statements. Inventory and cost of sales reported in quarterly reports are based on estimated gross profit rates. Fife does have reliable perpetual inventory records. 2. The company records income tax expense for...
Accountants follow generally accepted auditing accounting standards and generally accepted accounting principles (GAAP). Distinguish between the...
Accountants follow generally accepted auditing accounting standards and generally accepted accounting principles (GAAP). Distinguish between the GAAS and GAAP. What professional organization establishes the GAAS and what is its purpose? What professional organization establishes the GAAP? Can GAAS exist without GAAP and/or vice versa and why is this so? Do GAAS and GAAP have different agendas and why is each needed?
TB TF Qu. 05-105 Generally accepted accounting principles often... Generally accepted accounting principles often allows companies...
TB TF Qu. 05-105 Generally accepted accounting principles often... Generally accepted accounting principles often allows companies to account for the same types of events in different ways. True or False True False
The phrase generally accepted accounting principles is an accounting term that
The phrase generally accepted accounting principles is an accounting term that
2. Firms speak of the use of Generally Accepted Accounting Principles (GAAP). Why is this approach...
2. Firms speak of the use of Generally Accepted Accounting Principles (GAAP). Why is this approach important and who assures that it is followed? (There are several parties involved) 3. What is accrual accounting and how does it differ from cash based accounting?
earch forums . Chapter 15 - Generally Accepted Accounting Principles DB #5 Why is it permissible to violate generally accepted accounting principles when preparing reports used strictly by management? Your response should be a minimum of 100 words. In your answer, explain and provide support as to why or why not it is acceptable and give an example for either argument. If you use an outside source in support of your answer, follow APA formatting for the reference. For this...
Assignment Questions: 1. One of the differences between Managerial Accounting and Financial Accounting is reporting flexibility. Financial reporting is restricted by Generally Accepted Accounting Principles whereas reporting in Managerial Accounting has fewer rules. a) Why is it permissible to violate Generally Accepted Accounting Principles when preparing reports used strictly by company management? b) Should external users always have the same information as internal users? Explain. 2. The United States uses accounting standards developed by the Financial Accounting Standards Board (FASB)...
TB TF Qu. 05-105 Generally accepted accounting principles often... Generally accepted accounting principles often allows companies to account for the same types of events in different ways. True or False True False
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