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Accounting Principles Accounting Principles

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					Accounting Principles

If everyone involved in the process of accounting followed their own
system or no system at all, there is no way to really see if a company is
profitable or not. Most companies follow what are called generally
accepted principles of accounting, or GAAP, and has great tomes in
libraries and bookstores in just over an object. Unless a company states
otherwise, you can read a financial statement to make the assumption that
the company has used GAAP.

If GAAP is principles used to prepare financial statements, and then a
company should make clear that other types of records used and are keen
to avoid use of the title of its financial statements that could mislead
people to check it out.

GAAP is the gold standard for preparing financial statements. Not
revealed that she used principles other than GAAP does a company legally
responsible for any misleading or misinterpreted data. Principles are
fine-tuned over decades and has been effective accounting and reporting
systems companies. different principles for different types of business
entities and for-profit non-profit companies, governments and other
enterprises.

GAAP is not cut and dried, however. They are rules and as such are often
open to interpretation. Estimates are dealing with time, and they require
good faith effort to correct. surely you've heard the term "creative
accountants", and this is when a company pushes the envelope a little (or
more) to make their business look more profitable than it could be true.
It is also called massaging the numbers. She may lose control and
accounting fraud quickly, also called cooking books. The results of this
practice can be devastating and ruin hundreds of thousands of lives, as
is the case of Enron, aid and other ceremonies