Financial statements serve many purposes for a business/accounting manager in the workplace. There are four main topics that encompass the real world of financial statements that are going to be investigated in depth as they each pertain to business and financial managers. The first concept investigated is the Generally Accepted Accounting Principles, followed with a dialogue on the topic of Historical Cost, and then there will be a heated argument or debate on whether Accrual Basis Accounting is dominant over Cash Basis Accounting. Finally, we will wrap things up with an analysis of Current Assets and Liabilities versus Non-Current Assets and Liabilities. Financial Statements are important management tools in order to keep the financial soundness of the company in check.
Generally Accepted Accounting Principles is the general guidelines that are used to govern financial accounting. It includes the standards and accounting principles accountants should and will follow to document transactions and use to prepare financial statements for various companies. Financial accounting information must be put together and distributed objectively. Third-parties who rely on the information distributed have the right that the data is free from bias and inconsistency. For this reason, financial accounting relies on certain guidelines that are called "Generally Accepted Accounting Principles" (GAAP). The Generally Accepted Accounting Principles also show us the detailed rules and standards issues by the Financial Accounting Standards Board (FASB.) In any report of financial statements, the researcher must indicate to the reader whether or not the information contained within the statements complies with the GAA ...