Generally Accepted Accounting Principles (GAAP)
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The paper relates that in the United States, the financial accounting standards for most organizations utilize the generally accepted accounting principles (GAAP). The paper explains how the GAAP standards and principles can be categorized into three categories of relevance, reliability and consistency, and then looks at the implementation of these standards in the healthcare industry. The paper concludes that GAAP is actually a simplified method of financial accounting to ensure that the utilization of financial resources are reported properly and there is a clear record of earnings in order for the proper taxes to be paid to the government.
From the Paper:"GAAP was not developed by a single entity, organization or agency but rather it is a collegial development whereby there were peer reviews that went through before each principle contained in the standards is approved. Even with the various contributions of different organizations, the Financial Accounting Standards Advisory Board or FASAB is the "organization that has been granted the authority to establish generally accepted accounting principles (GAAP) by the Securities and Exchange Commission (SEC) (Bradford, 2007)." Accounting and financial reporting standards are essential for public accountability and for an efficient and effective functioning of our democratic system of government (FASAB, 2009). As a result, FASAB has for its mission the promulgation of "federal accounting standards after considering the financial and budgetary information needs of citizens, congressional oversight groups, executive agencies, and the needs of other users of federal financial information (FASAB, 2009)."
"The financial and accounting standards and principles contained in the GAAP can be categorize into three major categories: relevance, reliability, and consistency. The relevancy principle of financial and accounting data and information means that the accounting entries being reported are significant, timely, applicable and mirrors exactly what is the financial condition of the organization at a specified reporting period."
Sample of Sources Used:
- Bradford, T. (2007, August 6). GAAP and accounting standards: An explanation of Generally Accepted Accounting Principles (GAAP). [Online] Retrieved June 12, 2010 from, http://gaap-standard-accounting-practices.suite101.com/article.cfm/what_is_gaap.
- Federal Accounting Standards Advisory Board (FASAB). (2009). Generally Accepted Accounting Principles (GAAP). [Online] Retrieved June 12, 2010 from, http://www.fasab.gov/accepted.html.
- RevenueRecognition.com.(2007). Revenue Recognition in the healthcare industry. [Online] Retrieved June 12, 2010 from, http://www.revenuerecognition.com/industry/healthcare-providers/
Cite this Term Paper:
Generally Accepted Accounting Principles (GAAP) (2013, March 06) Retrieved January 16, 2022, from https://www.academon.com/term-paper/generally-accepted-accounting-principles-gaap-152521/
"Generally Accepted Accounting Principles (GAAP)" 06 March 2013. Web. 16 January. 2022. <https://www.academon.com/term-paper/generally-accepted-accounting-principles-gaap-152521/>