General Ledger Accounting Software

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There are four basic accounting principles which include historical cost, realization, matching and full disclosure. Discover how each principle works in the field of accounting, like how historical cost is recording items at what they are paid for, with insight from a certified public account in this free video on accounting. Expert: Shanis Windland Bio: Shanis Windland has a Bachelors of Science degree in accounting from Central Washington University. She is a certified public accountant licensed in the state of Washington. Filmmaker: Jay Windland

If GAAP are not the principles and ethics used for preparing financial statements, then a business needs to make clear which other form of accounting they’re used and are bound to avoid using titles in its financial statements that could mislead the person examining it.

GAAP are the gold standard for preparing financial statement. Not disclosing that it has used principles other than GAAP makes a company legally liable for any misleading or misunderstood data. These accounting principles have been fine-tuned over decades and have effectively governed accounting methods and the financial reporting systems of businesses. Different accounting principles have been established for different types of business entities, such for-profit and not-for-profit companies, governments and other enterprises.

GAAP are not cut and dried, however. They’re guidelines and as such are often open to interpretation. Estimates have to be made at times, and they require good faith efforts towards accuracy. You’ve surely heard the phrase “creative accounting” and this is when a company pushes the envelope a little (or a lot) to make their business look more profitable than it might actually be not worrying about accounting principles and ethics. This is also called massaging the numbers. This can get out of control and quickly turn into accounting fraud, which is also called cooking the books. The results of these practices can be devastating and ruin hundreds and thousands of lives, as in the cases of Enron, Rite Aid and others which did not have good accounting principles.

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As an example, a company’s accountants periodically measure the profit and loss for a month, a quarter or a fiscal year and publish these results in a statement of profit and loss that’s called an income statement.  These statements include elements such as accounts receivable (what’s owed to the company) and accounts payable (what the company owes). It can also get pretty complicated with subjects like retained earnings and accelerated depreciation. This at the higher levels of accounting and in the organization.

Much of accounting though, is also concerned with basic bookkeeping. This is the process that records every transaction; every bill paid, every dime owed, every dollar and cent spent and accumulated.

But the owners of the company, which can be individual owners or millions of shareholders are most concerned with the summaries of these transactions, contained in the financial statement. The financial statement summarizes a company’s assets. A value of an asset is what it cost when it was first acquired. The financial statement also records what the sources of the assets were. Some assets are in the form of loans that have to be paid back. Profits are also an asset of the business.

In what’s called double-entry bookkeeping, the liabilities are also summarized. Obviously, a company wants to show a higher amount of assets to offset the liabilities and show a profit. The management of these two elements is the essence of accounting.

There is a system for doing this; not every company or individual can devise their own systems for accounting; the result would be chaos!

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Accounting Principles: General Ledger Software

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Accounting Principles, 4E, General Ledger Dos

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Carol Yacht’s General Ledger & Peachtree Complete 2004 Cd to Accompany Fundamental Accounting Principles

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Accounting Principles, Seventh Edition addresses the issues that teachers and students of accounting have said are important. These include student success, student motivation, student problem-solving skills, student decision-making skills, and technology to assist learning and technology to assist teaching. In the Seventh Edition, we’ve built on the unparalleled readability and instructor/student-approved pedagogy that helped us achieve our status as #1 in C… More >>

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