Accounting has always been considered as the language and basic tool of business. Over the last two decades, the field of accounting has been changing dramatically in response to computer revolution, increased government regulations, frequent tax law changes, the globalization of business, and the on-going downsizing and restructuring of corporations. In this increasingly complex and competitive business environment, accounting skills are very much in demand and accounting has become a dynamic career. Accountants are now performing as prestigious role of financial experts, system professionals, management consultants, budget analysts, etc.
Generally Accepted Accounting Principles (GAAP)
GAAP are the foundation, and ground rules of accounting practice. GAAP are followed by accountants all over the world.
Definition of GAAP: The accounting profession has developed a common set of standards that are generally accepted and universally practiced. This common set of standards is called generally accepted accounting principles (GAAP).
Luca Pacioli
Luca Pacioli was born in
Sansepulcro, in Tuscany. He was probably born during 1445. He born in a
poor family. He lived as a child with the Befolci family. This town is very
much in the centre of Italy about 60 km north of the city of Perugia. As far as
Pacioli was concerned, perhaps the most important feature of this small
commercial town was the fact that Piero delta Francesca had a studio and
workshop in there and delta Francesca spent quite some time there despite
frequent commissions in other towns.
History of Accounting
The
history of accounting is very ancient like thousands of years. But the history
of accounting profession is very young. It is indeed that modern civilization
is impossible without accounting. . It is indeed that modern civilization is
impossible without accounting.
Origin:
The
origins of accounting are generally attributed to the work of Luca Pacioli, and
Italian Renaissance mathematician. The concept of accounting comes from his
book. But it is considered the first book on -counting was Della Mercatura e
del Mercante Perfetto written by Benedetto Cotrugli in 1458 and published in
1573.
The principles of Accounting Information System
Accounting is known as the language of business because it
record and reveal business information. The accounting profession has developed
standards and rules that universally accepted. This common set of standards is
called generally accepted accounting principles (GAAP). In developing generally
accepted accounting principles certain basic assumptions are made. These
assumption provide a foundation for the accounting process. The main
assumptions are-
Difference between Copyright & Franchise
Copyright VS
Franchise
Copyrights are exclusive rights granted by the government to
the author or the artist enabling him to publish, sell or otherwise control his
literary, musical or artistic works. The right to exclusive control is issued
for a period of certain years, with the privilege of renewed for another sum of
years.
FOB Shipping Point VS FOB Destination
FOB Destination
FOB Destination is the freight term indicating that the
goods will placed free on board at the buyers place of business and the seller
pays the freight costs.
FOB Shipping Point
FOB Shipping Point is the freight term indicating that the
goods will placed free on board the carrier by the seller and the buyer pays
the freight costs.
Similarities and differences among Depreciation, Depletion and Amortization
Depreciation is the systematic and rational allocation of
tangible and current asset cost over the periods benefited by the use of the
asset.
Depletion is the periodic allocation of the cost of natural
resources.
Amortization is the periodic cost allocation process for
intangible assets.
Define contingent liabilities. How and when should a contingent liability be recorded in the accounts?
(a) A
possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the enterprise; or
(b) A
present obligation that arises from past events but is not recognized because:
i.
It is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation; or
ii.
The amount of the obligation cannot be measured
with sufficient reliability.
Physical Depreciation VS Functional Depreciation
All plant/fixed assets, except land, depreciated. Factors
that contribute to depreciation are physical and functional. Physical
depreciation arises from the actual use of a plant asset. Functional
depreciation is due to obsolescence factors such as technological advances and
less demand for a product.
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