Discuss in 350 to 700 words the following topics: Include at least three (3) references from different sources
1. Identify and describe the sources of generally accepted accounting principles. 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. Describe the types of business structures and the defining features of each structure.
Please see attached file for answers.
First, generally accepted accounting principles make financial statements not only within a company, but also from one company to another, from one industry to another consistent and uniform, and hence comparable (David, 1994, p. 29). This importance of GAAP makes these principles very authoritative. In this view, for the private sector entities follow the GAAP promulgated by the Financial Accounting Standards Board or FASB. As a matter of fact, since 1973, FASB "has been the designated organization in the private sector for establishing standards of financial accounting" (Financial Accounting Standards Board, n.d.).
Hence, the following are the different sources of GAAP for public entities presented according to priority:
1. Rules and interpretative releases from the Securities Exchange Commission
2. FASB Accounting Standards Codification
3. International Accounting Standards
This hierarchy is important in that when these sources vary in their recommended generally accepted accounting treatment for a particular transaction, then the priority source will prevail.
However, as to the FASB sources, as a result of the ...
The types of business structures and features are examined.