Question

Why is accounting important? Who governs accounting? How consistent is accounting among companies in the same industry? Can you show an example of where accounting rules may be applied differently and yet consistent with GAAP? Why do we care as a society about accounting rules? Show by way of example, what happens when a company does not follow legitimate accounting practices.

Explain the value of financial ratios and why they are important? How are they used by companies, by investors, by analysts?

Answer 1

Accounting plays a vital role in running a business because it helps you track income and expenditures, ensure statutory compliance, and provide investors, management, and government with quantitative financial information which can be used in making business decisions.

Accounting is important for small business owners as it helps the owners, managers, investors and other stakeholders in the business evaluate the financial performance of the business. Accounting provides vital information regarding cost and earnings, profit and loss, liabilities and assets for decision making, planning and controlling processes within a business.

The main objective of accounting is to record financial transactions in the books of accounts to identify, measure and communicate economic information. Moreover, tax reporting agencies require you to keep books at a minimum level that tracks income and expenditur

governs accounting

The Financial Accounting Standards Board (FASB) is an independent nonprofit organization that is responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States, following generally accepted accounting principles (GAAP).

The U.S. Securities and Exchange Commission has the legal authority to provide oversight and regulation of the accounting profession. However, SEC policy is to stay in the background and allow industry self-regulation. Private organizations provide governance and establish professional accounting standards.

Generally accepted accounting principles (GAAP) are controlled by the Financial Accounting Standards Board (FASB), a nongovernmental entity. The FASB creates specific guidelines that company accountants should follow when compiling and reporting information for financial statements or auditing purposes.

Generally accepted accounting principles (GAAP) refer to a common set of accounting principles, standards, and procedures issued by the Financial Accounting Standards Board (FASB). Public companies in the United States must follow GAAP when their accountants compile their financial statements. GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information.

GAAP may be contrasted with pro forma accounting, which is a non-GAAP financial reporting method. Internationally, the equivalent to GAAP in the United States is referred to as international financial reporting standards (IFRS).

we care as a society about accounting rules because

accounting is important because it provides a lot of information that business owners, managers, and investors need in order to evaluate the financial performance of the company ("The Importance Of Accounting Standards") .

Accounting provides jobs to the society . After regular study of accounting , human being can also learn to make budget and every work is done by well planned and according to resources of society . Accounting can help society by handling Corporate finance and money by recording it properly .