Generally
accepted accounting principles are the conventions, rules and procedures necessary
to define accepted accounting practice at a particular time. These principles
provide a foundation for measuring and disclosing the results of business
transaction and events.
GAAP
are conventional, that is, they become generally accepted by agreement rather
than by formal derivation from as se of postulates or basic concepts.
How
GAAP Developed
The
principles are developed on the basis of experience, reason, custom, usage and
to a significant extent, practical necessity. These principles are widely used
and accepted that may be produced to underline and accounting statements.
Role
of Accountant
GAAP
instructs an Accountant what to do in the usual case when he has no reason to
doubt that the affairs of the organization are being honestly conducted. Since
he has reason to believe that this basic assumption is false, an entity
different situation confronts him.
No comments:
Post a Comment