What are the generally accepted accounting principles and concepts?

What are the generally accepted accounting principles and concepts?

Generally accepted accounting principles, or GAAP, are a set of rules that encompass the details, complexities, and legalities of business and corporate accounting. The Financial Accounting Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved accounting methods and practices.

Which of the financial statements are required by the generally accepted accounting principles?

The following three major financial statements are required under GAAP: The income statement. The balance sheet. The cash flow statement.

What is the significance of a cash flow statement?

In this article we will discuss about Cash Flow Statement:- 1. Concept of Cash Flow Statement 2. Classification of Cash Flow Statement 3. Presentation 4. Significance 5. Limitations. A Cash flow statement discloses net increase (or decrease) in cash during an accounting period.

How are accounting concepts used in financial statements?

Since it does not allow recognizing of assets at its realizable values, the financial statements do not provide the actual picture of the financial status of the entity Accounting concepts are the generally accepted rules and assumptions that assist accountants in the preparation of financial statements.

What are the generally accepted accounting principles ( GAAP )?

The Generally Accepted Accounting Principles (GAAP) are a set of rules, guidelines and principles companies of all sizes and across industries in the U.S. adhere to. In the U.S., it has been established by the Financial Accounting Standards Board (FASB) and the American Institute of Certified Public Accountants (AICPA).

What are the two types of cash flow?

In general, there are two types of cash flow described in a business: positive cash flow and negative cash flow. Positive Cash Flow: positive cash flow means that the cash coming into a business is greater than the cash going out of a business.