Basic accounting concepts and business structures danny silvio acc/537 10/10/11 professor basic accounting concepts and business structures generally accepted accounting principles the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements are prepared by the. Basic accounting concepts and business structures additionally, with the different ways enterprises account for money and the distinctive business trustees, having these written standards makes all companies accountable. Explaining basic accounting concepts and business structures i will explain the basic accounting concepts and business structures from the following topics: gaap sources and hierarchy good accounting information using the qualities of accounting principles difference between accrual based accounting and cash basis of accounting types of business structures and the features of each structure. Business structures essay investments and supervise the company's accounting and budgetary system other activities carried out in accounting include payment of wages and salaries, depreciation of fixed assets, maintaining shareholder records and paying shareholder' dividends. Explaining basic accounting concepts and business structures laurie d melvin acc/537 - financial accounting may 9, 2011 james neuner, mba one of the most important decisions to make when one chooses to start a business is knowing the type of legal organizations to select because the decision affects many aspects of the business.
The decision to build a small business accounting team depends upon the aspirations of the business owner if you operate a one-person, unincorporated business with simple transactions and have a basic understanding of record keeping then a financial accounting software program will do. Explaining basic accounting concepts and business structures there are many important aspects of accounting the generally accepted accounting principles are accounting rules set out for companies to follow to ensure all companies are on the same page business wise qualities of accounting are. Llc the limited liability company, or llc, is also an option to choose for accounting purposes this business structure is actually a hybrid of a partnership and a corporation.
A constructive way to summarize basic accounting concepts and business structures is to start by making an outline that includes specific concepts and then describe them in simple terms. There are so many types of business structures, that it can get very hard to choose one this basic breakdown will help you find the one right for you.
Basic accounting concepts and business structures go hand-in-hand usually the business structure will determine the type of accounting concepts it will use generally accepted accounting principles (gaap) are needed for effective accounting information. Basic accounting concepts and business structures sources of generally accepted accounting principles the generally accepted accounting principles (gaap) respected in the accounting and auditing fields are prescribed by. Basic accounting standards and business structures whereas there is a need for accounting and financial professionals in the day-to-day operation of businesses to preserve their financial health, there is also a need by individuals. The most common forms of business are the sole proprietorship, partnership, corporation, and s corporation a limited liability company (llc) is a business structure allowed by state statute legal and tax considerations enter into selecting a business structure. The corporate structure is more complex and expensive than most other business structures a corporation is an independent legal entity, separate from its owners, and as such, it requires.
Creating a file structure for accounting is critical for the overall success of the business if properly structured, data retrieval and information access add to the overall value of the company this article teaches the new business owner how to create a file structure to use with accounting. Basic accounting concepts and business structures 2 basic accounting concepts and business structures there are three sources of generally accepted accounting principles the financial accounting standards board (fasb), the american institute of certified public accountants (aicpa), and the emerging issues task force (eitf. Explaining basic accounting concepts and business structures acc/537 the sources of generally accepted accounting principles the generally accepted accounting principles (gaap) was created by four organizations which were instrumental to the development of the financial accounting standards the securities exchange commission (sec), american institute of certified accountants (aicpa.
Basic accounting concepts and business structures with the decision to start a business also is the choice as to which type of business to start the business can be a sole proprietorship, partnership, or corporation. Some of the basic accounting terms that you will learn include revenues, expenses, assets, liabilities, income statement, balance sheet, and statement of cash flows you will become familiar with accounting debits and credits as we show you how to record transactions. Basic accounting principles from entrepreneurcom and your business structure the cash method is the most simple in that the books are kept based on the actual flow of cash in and out of the.
Teach and learn basic accounting principles, bookkeeping skills, and methods accounting provides information about the financial position of a business or company accountants create financial records of business transactions, and prepare statements containing the assets, liabilities, and operating results of a business. Explaining basic accounting concepts and business structures good information is the basis of accounting development in accounting practices has led to valuable information from the standardization boards for accounting principles.
Volume 1 of basic accounting concepts, principles, and procedures ensures that the reader develops a solid comprehension of the two most important concepts necessary to learn accounting: the fundamental structure of a business or other economic entity. Business structure affects many aspects of your company, including your tax obligations choosing the right structure for your business could mean the difference between expensive, time-consuming taxes or affordable, simplified tax liabilities. A corporation is a more complex business structure a corporation has certain rights, privileges, and liabilities beyond those of an individual doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as increased licensing fees or decreased personal control. Basic accounting concepts and business structures rose latifi acc 537 november 10th 2012 professor joh david basic accounting concepts and business structures generally accepted accounting principles (gaap) and related hierarchy the common set of standards and procedures is called generally accepted accounting principles (gaap.