Accrul Paper

ACCRUAL BASIS ACCOUNTING

October 30 2013

Victor Cochran

With pretty much all businesses, they would need the feedback to see how they are doing plus to help determine if changes are necessary. This information would come as a result of the accounting practices. The information is so crucial that they have a set of rules that have been established to make sure information would not properly represented. In a uniform is easy to help understand for all concerned parties. These rules are known as GAAP (Generally Accepted Accounted Accounting Principles).

Know the accounting information is to conform the GAAP standards, the several characteristics that need to be present: the relevance, the reliability, the consistency and the comparability. If this information is lacking any all or any of these characteristics it would be most likely not be trusted. Information to be relevant would be all about timing, accounting information is the only relevant if it can be used to make a decision for a benefit of the company. There is a main thing that accounting information would be relevant if it could help predict future events or even the feedback as the company’s standings.

Reliability is word implies to the information that can be counted on, for information and it must be verifiable to help ensure that its error and mistake free. All information must be biased free and neutral, so only the cold hard facts are there to represented and not the opinion of any of the outsides parties. Comparability is information that must be easily comparable between the companies; The General Electric needs that will need to compare their financial information with the top competitors such as “Siemens”.

So with the data it must be presented in a uniform way, so it will make it easy for comparison, which is one main benefits of the GAAP. It provides the guideline for companies to use, and a final consistency, plus characteristic. This is where the company would use the same...