Basic Accounting Principles
Financial accounting data is retrospective in nature, reporting on events that occurred
in the past. This information must adhere to specific accounting rules or principles
known as Generally Accepted Accounting Principles in order to allow comparisons
across firms (GAAP).
The conventions, rules, processes, practices, and standards used in the collection,
preparation, and presentation of accounting data in financial statements are referred to
as GAAP. The accounting profession has established guidelines that will govern how
accountants will accumulate, measure, record, and report the financial affairs and
'activities of the business, because it is critical that the recipients of accounting reports
be able to understand and interpret these reports.
The Professional Regulatory Commission (PRC) established the Financial Reporting
Standards Council (FRSC) under the Philippine Accountancy Act of 2004's
Implementing Rules and Regulations to assist the Board of Accountancy (BOA) in
carrying out its power and function of promulgating accounting standards in the
Philippines. The major goal of the FRSC is to develop internationally recognized
accounting standards in the Philippines.
The FRSC's goal is to create a single set of high-quality, comprehensible, and
enforceable accounting standards that require high-quality, transparent, and
comparable information in financial statements and other financial reporting to assist
participants in various capital markets and other users of information in making
economic decisions.
Some of the Generally Accepted Accounting Principles are:
A. Business Entity Concepts
The corporate entity is considered as independent and distinct from the owner(s)
of the business, according to this idea. As a result, accounting records for even the
smallest firm, a single proprietorship, must be maintained separate from the owner's or
owners' personal concerns.
It is critical to adhere to this notion for the following reasons:
1. Measure the success of a certain firm separately in terms of profitability, cash flow,
and other factors.
2. It assists in evaluating the financial status of each and every firm on a specific day.
3. When a business's documents are mixed together with those of other
entities/individuals, auditing them becomes difficult, if not impossible.
Financial accounting data is retrospective in nature, reporting on events that occurred
in the past. This information must adhere to specific accounting rules or principles
known as Generally Accepted Accounting Principles in order to allow comparisons
across firms (GAAP).
The conventions, rules, processes, practices, and standards used in the collection,
preparation, and presentation of accounting data in financial statements are referred to
as GAAP. The accounting profession has established guidelines that will govern how
accountants will accumulate, measure, record, and report the financial affairs and
'activities of the business, because it is critical that the recipients of accounting reports
be able to understand and interpret these reports.
The Professional Regulatory Commission (PRC) established the Financial Reporting
Standards Council (FRSC) under the Philippine Accountancy Act of 2004's
Implementing Rules and Regulations to assist the Board of Accountancy (BOA) in
carrying out its power and function of promulgating accounting standards in the
Philippines. The major goal of the FRSC is to develop internationally recognized
accounting standards in the Philippines.
The FRSC's goal is to create a single set of high-quality, comprehensible, and
enforceable accounting standards that require high-quality, transparent, and
comparable information in financial statements and other financial reporting to assist
participants in various capital markets and other users of information in making
economic decisions.
Some of the Generally Accepted Accounting Principles are:
A. Business Entity Concepts
The corporate entity is considered as independent and distinct from the owner(s)
of the business, according to this idea. As a result, accounting records for even the
smallest firm, a single proprietorship, must be maintained separate from the owner's or
owners' personal concerns.
It is critical to adhere to this notion for the following reasons:
1. Measure the success of a certain firm separately in terms of profitability, cash flow,
and other factors.
2. It assists in evaluating the financial status of each and every firm on a specific day.
3. When a business's documents are mixed together with those of other
entities/individuals, auditing them becomes difficult, if not impossible.
