What are the accounting procedures?

Accounting procedures are rules or standards that are used to prepare, present and report the financial status of companies. Countries are developing standardized procedures that allow companies to report their financial state in a way that is useful for potential investors and creditors and the general public. For example, the use of generally accepted accounting principles (GAAP) has been introduced in the United States to ensure a common company between companies. Standards are not directly set by governments, but rather by organizations of the private sector in which the financial professions set standards. In the United States, financial reporting is regulated by the Federal Advisory Board for Accounting Standards (FASAB).

Committee on International Accounting Standards (IAS (IASC) has been developed as an independent organization of the private sector to support the uniformity in accounting principles used at the global level. Standardized accounting procedures are important to ensure that financialYou are comparable from the country from the country. Comparison is critical of the modern global market. The economic entity concerns the ability to separate the company, its owners and other companies. The company is essentially an identifiable unit that can be responsible for its actions.

The concept of concerns is related to the assumption that the company will continue to exist. The currency unit refers to the fact that there is an accepted form of measurement of the value of society and its profits. Periodicity means that the activities can be measured according to specific time periods, whether it is a year, a quarter or a month.

Four basic accounting principles are generally used to record business transactions: historical costs, revenue recognition, agreement and complete publication. GAAP regulation in the United States requires that assets and liabilities be charged and reported on the basis of costs. Use of historicalThe cost of the item provides a stable and consistent scale to compare the value and determination of profit or loss if the item is sold.

Recognition of income concerns the rule for determining when income is realized as income. It is assumed that the amount of income can be measured and that the activity or activities that must be carried out to achieve income has been completed. In other words, income is recorded when society is recognized and earned by society.

The most commonly used accounting method is an accrual method. According to this method of Aznov's business transaction, because they are produced, rather than waiting for the money to be received or paid. In a cash -based system, the income is not recorded until the cash is actually transferred. Any of these methods are governed by the principle of revenue recognition; This means that the income is reported, recorded and reported by the control tax authority.

The comparison concerns the expenditure that has taken place. The concept is that expenditureThey are tied to the specific period in which they occurred. In addition, they are associated with income against which the costs are deducted. The recognition of expenditure is therefore associated with the recognition of income.

The principle of complete publication in accounting procedures is related to the reporting of the company's activities. Procedures require the Company to provide information that will allow informed decisions of investors and other stakeholders. The information is formally presented in the financial statements, on balance sheets and in the accompanying additional information. The accounts will also provide instructions in the format for these financial statements.